It’s Time for Facebook to Copy WeChat

Many in the West have long disdained Chinese firms as copycats. Some believe that no innovation from China can be called original. Baidu looks like Google, they argue, Alibaba is a version of Amazon, and Tencent imitates Facebook.

Wrong. In the example of Tencent’s WeChat, the Chinese social media platform, Western equivalents such as Facebook Messenger, What’s App, or Twitter look hopelessly inferior.

Hand holding smart phone with abstract glowing lines concept

As I wrote two years ago, there is nothing like WeChat in the West. A super app, as some call it, WeChat is a mobile messaging board offering free video calls, group chat, and many fun features such as a shake function to link contacts with other users. Now it boasts 700 million users. Each user has a personal QR code that serves as a digital ID. Over half of users have linked their bank accounts to its mobile payment system. They can shop, hail a ride or book a hotel – right there while they are chatting with friends.

At an event in Shanghai last year, Elaine Chow, communication manager of the global digital consultancy Razorfish, demonstrated how she went about her day without her wallet. Continue reading

Will China Become the World’s Innovation Hotbed?

I am honored to be invited to speak at the Economist Innovation Summit in Hong Kong on Sept. 6, 2016.

InnovationSummitThe Summit gathers entrepreneurs, venture capitalists, and industry luminaries to examine how Chinese firms have evolved from copycats to innovators, and what impact they will have on the rest of the world.

A couple of years ago, I wrote an article Why China Will Lead Innovation in Social and Mobile Commerce. Clearly, Chinese firms are innovating in many other fields as well. An Economist article indicates that:

In fields from gene editing to big-data analytics to 5G mobile telephony, Chinese experts are now among the world’s best. Sunway TaihuLight (pictured), a supercomputer made using only local computer chips, is five times as fast as the best American rival…. WeChat, a social-media and payments platform with 700m monthly active users, is more useful and fun than Facebook, Twitter and WhatsApp put together.

Continue reading

600 Million Consumers, 3 Emerging Trends

The Chinese economy may have slowed down, but Chinese consumers haven’t. In 2015, consumer spending increased approximately 13 percent, compared to less than 7 percent growth in GDP.

HK_consumer2_450A recent McKinsey report indicates that Chinese consumers have remained confident despite the economy slowing down. Among the 10,000 individuals surveyed by McKinsey, 55 percent expected their incomes would increase significantly over the next five years, compared to just 32 percent of consumers in the United States and 30 percent in the United Kingdom believed so.

The Chinese middle class now represents one-half of China’s population. Although they are new consumers, they are maturing and modernizing rapidly. Three characteristics are emerging: Continue reading

Can The US and China Coevolve?

I just finished reading Henry Kissinger’s book On China, a five-hundred-page volume of detailed historical accounts of China’s relationship with the West. It was an excellent read. Few statesmen and policy makers in our time understand China as well as Dr. Kissinger.

KissingerMaoZhouKissinger begins by introducing the Chinese way of thinking. He couldn’t have used a better analogy than by describing a go (wei-qi) player, in comparison to a chess player:

The chess player aims for total victory. The wei qi player seeks relative advantage…. Where the skillful chess player aims to eliminate his opponent’s pieces in a series of head-on clashes, a talented wei qi player moves into “empty” spaces on the board, gradually mitigating the strategic potential of his opponent’s pieces. Chess produces single-mindedness; wei qi generates strategic flexibility.

Many misunderstandings and miscommunications between China and the West are indeed caused by different ways of thinking. In my book The Chinese Dream, I attempted to explain the differences. But Kissinger has done a masterful job in getting inside the mind of a wei qi player, and illuminating for the reader Continue reading

“The Chinese Dream Is to Leave China”

When I wrote my book The Chinese Dream eight years ago, I observed an extreme optimism and anxiety among the newly-bred middle class in China.

middle class mediocreAt that time, although many were anxious, there was still a fair amount of optimism. Even a Pew Global Attitudes Survey said that more than two-thirds of Chinese expected their personal position to improve in the coming years.

Only a few years later, things have changed substantially. According to a New York Times article, middle class Chinese are anxious to move their money out of the country. Although the government has tightened the control on capital flight, people find ways to get around the restriction. The article indicates that in the last year and half, individuals and companies have moved about $1 trillion out of the country.

And, more people are trying to leave the country:

In fiscal 2014, 76,089 Chinese were awarded permanent residency status in the United States, up by 4,291 from the previous year. Of the 10,692 investment visas provided by the United States in the 2014 financial year, 9,128 went to Chinese nationals, up about 30 percent from the previous year. Meanwhile, 88 percent of Australian “significant investor visas” have been given to Chinese citizens.

More and more Chinese students are studying overseas and many of them are looking to stay abroad:

In the 2014-15 academic year, at least 304,040 Chinese students were studying in the United States, up about 110,000 from 2011-12.

The economic slowdown has certainly caused anxiety. But lack of confidence in one’s own country goes far beyond economic reasons. As I have said and written many times, without the rule of law, the Chinese middle class will never feel secure in China.

This reminded me of a conversation I had with a professor in China early this year. While attending the Stanford+Connects event in Shanghai, I shared a taxi with a Italian professor who leads the China program at Zhejiang University. Naturally, we had a discussion about China. When he learned I wrote a book called The Chinese Dream, he asked what is the Chinese Dream, and what’s the difference between the Chinese Dream and American Dream. Before I elaborated, he said something that took my breath away:

“I think the American Dream is that everyone wants to go to America; and the Chinese Dream is that everyone wants to leave China.”

America’s Smart Congagement In Asia Pacific

Last week, Daniel Russel, Assistant Secretary of State for East Asian and Pacific Affairs, came to speak at the Stanford event, “America’s Pacific Future Is Happening Now,” on the administration’s rebalance to Asia policy.

Evernote Snapshot 20160421 121042Mr. Russel began the talk by saying that the relationship between the U.S. and the Asia Pacific “has changed in a big way” in the last seven years. President Obama is determined to use diplomacy to advance American interests in the region.

Russel discussed four aspects of the “rebalance” strategy. First, to increase trade and investments in Asia Pacific. The world’s economic gravity has shifted significantly to the Asia Pacific. The region represents nearly half of the world’s population with a burgeoning middle class. America recognizes that its future is critically linked to that part of the world.

Second, to strengthen US relationships with its allies to enhance security, which is at the center of the “rebalance.” Continue reading

The UK Wants to Be China’s Best Friend, Why Not the US?

In a recent Commonwealth Club event in Silicon Valley, two prominent China experts, Martin Jacques, author of When China Rules the World, and Susan Shirk, author of China: Fragile Superpower, had a fascinating exchange of opinions about China’s relationship with the West.

Photo Credit: Frank Jang of the Committee 100.

Photo Credit: Frank Jang of the Committee 100.

The premise of the discussion was that the United Kingdom is the U.S.’s closest ally, but it has adopted a very different policy toward China. As I wrote here, the British now call themselves “China’s best partner in the West.” Last March, the U.K. decided to join China-led Asian Infrastructure Investment Bank (AIIB) despite the strong opposition from the U.S. When the Chinese President Xi Jinping visited the U.K. in November, the British government showered him with an extraordinary pageantry – a startling contrast to his treatment from the U.S. where President Obama threatened to sanction China.

“This is a symptom of the rise of China,” Mr. Jacques said. “It represents a shift in [global] geopolitics.”

Susan Shirk, who is also a former Deputy Assistant Secretary of State during the Clinton administration, said the United States has a consistent policy toward China. Since Nixon’s time, Continue reading

War or Peace in the South China Sea?

Last week, Taiwan’s president Ma Ying-jeou made a visit to Itu Aba, a disputed island in the South China Sea. Itu Aba, also known in Chinese as “Taiping Island,” is under Taiwan’s control. Taiwan has recently finished upgrading a port and built a lighthouse. The island has an airstrip and a hospital.

MaYingjeouTaipingWhile Washington considers the visit “extremely unhelpful” to regional stability, many in China applaud it. The rational is that Taiwan shares China’s claims in the South China Sea. Since Taiwan is part of China, Ma’s assertion proves that the South China Sea is part of China’s territory.

On WeChat, China’s most popular social media site, people cited Ma’s speech on Itu Aba that Spratly Islands were originally discovered by their fore-bearers during the Han Dynasty (200 BC). At least during the Qing Emperor Kangxi’s time (around 1700), China had officially incorporated most islands and reefs into China’s coastal defense system.

After WWII, the U.S. sent Chiang Kai-shek-led Chinese troops to take over Itu Aba from the Japanese. In 1947, Chiang Kai-shek, China’s then president, issued maps with eleven dotted lines that included virtually all of the islands in the South China Sea. Continue reading

Xi Jinping’s Mideast Trip to Push “One Belt One Road”

The Chinese president Xi Jinping has recently completed a three-nation tour in the Middle East – Saudi Arabia, Egypt, and Iran, offering tens of billions in loans and investments. These three countries are strategically located on the routes of the new silk roads that China is trying to revive, also known as “One Belt, One Road.”

MiddleEastMapAccording to a Reuters article, Iran’s supreme leader Ayatollah Ali Khamenei told President Xi Jinping during the visit that “Iranians never trusted the West…. That’s why Tehran seeks cooperation with more independent countries” (like China).

Xi certainly wants to cash in on this distrust. The two countries agreed to increase bilateral trade to $600 billion in the next 10 years. Among many agreements signed are 17 memorandums to kick-start “a maritime Silk Road of the 21st century,” one of the two routes of the “One Belt, One Road” program. Continue reading