China is facing a challenging juxtaposition in the coming years: can the government remain in control of business and media while also opening up the country to the knowledge economy?
China has uplifted more humans in a shorter period of time than any other country in the history of the planet. That mesmerizing growth engine, though, is starting to face an intense slog. Economic growth has slowed considerably, and while there are vagaries to these indicators, it is clear that China needs to rebuild its economy as it migrates from industrials into services. The future (of course) is all the buzzwords that linger in Silicon Valley coffee shops: innovation, startups, and entrepreneurship, mixed in with some Chinese flavors like indigenous technology development. China has designs to be the world-leader in semiconductors and artificial intelligence. To get there though, it needs to create the intellectual environment to push the frontiers of science and technology. That’s the debate happening right now. On one side, you have this discussion from the New York Times’ Asia business columnist Li Yuan from this weekend. Chinese entrepreneurs are supposedly fleeing the country and seeking safer waters as the government clamps down on dissent and further censors China’s already narrow internet.Few are predicting a crash, but worries over China’s long-term prospects are growing. Pessimism is so high, in fact, that some businesspeople are comparing China’s potential future to another country where the government seized control of the economy and didn’t ease up: Venezuela. Only one-third of China’s rich people say they are very confident in the country’s economic prospects, according to a recent survey of 465 wealthy individuals by Hurun, a Shanghai-based research firm. Two years ago, nearly two-thirds said they were very confident. Those who have no confidence at all rose to 14 percent, more than double the level of 2018. Nearly half said they were considering migrating to a foreign country or had already started the process.Minxin Pei, a well-known writer on China’s business environment and politics, was quoted by Yuan as saying:
“It’s clear to the private businesspeople that the moment the government doesn’t need them, it’ll slaughter them like pigs. This is not a government that respects the law. It can change on a dime.”China’s government furiously denied the article’s contention, arguing in its international-focused mouthpiece that:
Because some Western media’s always tend to smear or even subvert China’s political system. Take Chen Tianyong’s story. With ulterior motives, the New York Times tells stories of certain Chinese individuals and then exaggerates the fact, thus declaring that there are serious problems in China’s economy and political system. This is their consistent practice and some foreign people who do not understand China will fall into the Western media’s trap. Chinese people always need to be on the alert for such ill-intentioned articles.(Really, it’s fun to read the Global Times in the morning, in the way that taking a New York City subway at 8:15am on Monday morning is fun). Yet, for all the entrepreneurs supposedly leaving, business opportunities remain robust. China’s government announced a huge economic development plan to create a “Greater Bay Area” region around Guangdong, Hong Kong, Macau and others to compete directly with California’s Bay Area (The Lesser Bay Area: Even Better Without High-Speed Rail!
![™](https://i0.wp.com/s.w.org/images/core/emoji/11.2.0/72x72/2122.png?w=1110&ssl=1)
Across the strait, Taiwan’s Silicon Valley is fizzling
![](https://i0.wp.com/techcrunch.com/wp-content/uploads/2019/02/GettyImages-941036428.jpg?resize=680%2C453&ssl=1)
Photo by keel via Getty Images
But according to a member of the opposition Chinese Nationalist Party (KMT), the Agency’s goal is hindered by cumbersome business regulations and restrictive visas and work permits. “Although [the government was] targeted to issue 2200 visas, the Plan so far has disbursed a mere two,” said Jason Hsu, a KMT legislator with experience in Taiwan’s innovation sector. Hsu said the government has not succeeded in attracting any global entrepreneurs to the island since the plan was implemented. The Agency has been slow to implement the Asia Silicon Valley plan, prioritizing other aspects, or simply failing to match action with words. Compounding Taiwan’s global talent crunch is competition from China and the US, with graduates moving house to take advantage of higher wages and better employment opportunities.You can’t build an innovative economy if the talent can’t or won’t show up.
U.S. slowing H-1B visas
![](https://i0.wp.com/techcrunch.com/wp-content/uploads/2017/02/immigration.jpg?resize=680%2C453&ssl=1)
Image by Blue Diamond Gallery used under Creative Commons
Intel investing heavily to regain lost ground in the battle for chip supremacy
![](https://i0.wp.com/techcrunch.com/wp-content/uploads/2019/02/Intel-Bob-Swan.jpg?resize=680%2C453&ssl=1)
Photo via Intel Corporation
…“If we want to play in a much larger market we’re going to continue to invest more in R&D, there’s no question about that,” he said. “We don’t want to get too penny wise and pound-foolish so we don’t invest for the future.”Traditional brand names chipmakers have lost dominant share by investing heavily in whatever was driving profits at the time, while ignoring emerging tech that has become the primary source of growth. Intel is now paying for their failure to move sooner.
Are India’s nationalist policies creating a closed internet?
![](https://i0.wp.com/techcrunch.com/wp-content/uploads/2019/01/GettyImages-1079372324.jpg?resize=680%2C474&ssl=1)
Photo by MONEY SHARMA/AFP/Getty Images
Obsessions
- We’re excited since Little Brown & Co just announced a retrospective from Netflix co-founder and original CEO, Marc Randolph, coming this fall and entitled “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea.”
- Lots of other book coverage coming this week including Billonnaire Raj by James Crabtree, The Next Factory of the World by Irene Yuan Sun, and The Next Billion Users by Payal Arora.
- More discussion of megaprojects, infrastructure, and “why can’t we build things”