Entrepreneurs now have a chance to develop technology that can act as an alternative to Chinese dominance.
Chinese technology protectionism has created fertile ground for local start-ups by eliminating the threat of foreign predators. The government has chosen which companies it can best control and has given them an advantage.
In 2009, the Chinese government banned Facebook. And even Mark Zuckerberg.despite having a wife of Chinese origin; studying Mandarin, and performing public relations stunts like jogging through the smog-filled streets of Beijing to tell how much he valued China. was unable to alter his approach. Zuckerberg even went so far as to create new tools for censoring and suppressing content to please the communists.
But the Chinese were smarter than they were. They saw no advantage in allowing a foreign company to dominate their technology industry. China has also blocked Google, Twitter, and Netflix, tripped up companies like Uber. Chinese technology companies are now among the most valuable in the world.Facebook’s Chinese competitor, Tencent, eclipsed the $500 billion mark in market capitalization in November 2017. Its social media platform, WeChat, allows you to pay for bills, order taxis and book hotels while chatting with friends. It’s so far ahead of progress that Facebook is actively seeking to import its apps into WhatsApp’s payment system. Many Chinese firms, such as Alibaba, Baidu and DJI, have raced ahead. With its 5G technologies and deep government ties, Huawei has become a global threat.
As I mentioned earlier in these columns, the protectionism that economists have long decried — which favors domestic supplies of physical goods and services — is supposed to limit competition, create monopolies, raise costs, and stifle competitiveness and productivity. But that’s not the issue in the world of technology. Knowledge and ideas spread instantaneously over the Internet. Entrepreneurs in one country can easily learn and duplicate innovations and business models in another country. Technologies are moving on exponential curves, becoming faster and cheaper, making them accessible to any country. Technology companies that do not innovate risk going out of business as local start-ups are continually emerging to challenge them.
Chinese technology protectionism has created a fertile ground for local start-ups by eliminating the threat of foreign predators. The government has chosen which companies it can best control and has given them the advantage.
Indeed, China learned some of its tactics from Silicon Valley, which does not believe in free markets either. The moguls of the Valley openly acknowledge the need to build monopolies and to gain an unfair competitive advantage through dumping capital. They are proud of their position in a global economy where the money is the ultimate weapon and winners take everything. If the software companies are unable to copy the technology, they must acquire the competitor. And then there are the data, the most valuable of all the technical resources. Data analysis enables everything from micro-targeting of advertisements to suppression of voters and population control.Mobile apps are the biggest spying devices ever invented, tracking not just the desires of their users but also their locations, shopping preferences, connections, political opinions and health.
That’s why top technology companies in both East and West, monopolists and predators, see India as the most juicy of all spoils. It has a massive market that is ripe for harvesting, and data on gold mines.India has also been naive in its data protection and domestic innovation policies; it has bought old propaganda about the need for open markets.
There are, some major differences between Chinese and American companies vying for Indian markets. The Chinese government is largely controlling the actions of its companies, providing them resources and technology that they have stolen from the West. It gives them every unfair advantage that they can steal more and subvert more democracies. Silicon Valley companies want more data to sell more products. They may show bad judgment and cross ethical lines, but they do not play geopolitics or endanger the sovereignty of free nations.
That is why the decision of the Indian Government to ban TikTok and other Chinese companies makes sense. What held Indian entrepreneurs back for a long time was the lack of Internet connectivity and mobile phones. When they became widespread, foreign companies stepped in. Eliminating some of this competition will give Indian entrepreneurs a chance to build technology that is changing the world. They would help not only India, but also the rest of the world, which is urgently looking for an alternative to Chinese power and dominance.