Chinese hi-tech is chasing the US


08/05/2016

In recent decades, the United States have admittedly been a global technology leader. Now, however, China is reducing the backlog in many industries - from drones and electric vehicles to smart phones and data analysis.



Last week, Chinese startup Mobvoi announced plans to launch sales of its smart watches in the United States, competing with Apple. Mobvoi, known for its voice recognition technology, is going to attract consumers not only with lower costs, but also to offer them a product which by its characteristics, including design, is not inferior to Apple watch, its investors claim.

The most popular electric vehicle is still considered to be Tesla, yet lately there were some questions about demand and corporate governance practices of Elon Musk, who decided to combine Tesla with his other company, SolarCity. With that, some of fund managers in Shanghai are eagerly waiting for new problems to come, as the company’s trouble will surely play for Chinese manufacturer of electric cars BYD. They believe in the Chinese company, even though price of its shares is high enough (BYD’s market cap exceeds its profit by 40 times), and the fact that this income is partly dependent on government subsidies and incentives, such as free license plates for electric vehicles.

"Revolution of first electric vehicles will take place in China," - says Wei Zhang, founder of Yuanhao Capital Management, which has large investments in BYD. Firstly, demand exceeds supply, explained he. Second, the battery BYD uses is better and cheaper; in addition, the company produces their batteries, while Tesla depends on supplies from Panasonic. Thirdly, interests of the company executives are similar. 

Chinese companies impose competition in other sectors as well. Last winter, American Palantir, engaged in analysis of the data, received a warm welcome from investors in Asia, who injected in the company more than $ 20 billion. Yet at the same time, the Chinese venture capitalists are still investing in their own analogues of Palantir. So, Sequoia Capital China invests in Beijing Fourth Paradigm. Chinese companies have an edge over their American competitors, and this is access to much more data. "China can succeed no less than the US since development of artificial intelligence technologies requires data, and the country has more of them", - says founder of Fourth Paradigm.

China has surpassed the US even in industries such as production of drones. Moreover, many Chinese financial and technology companies are now more diversified, and attract more interest than the US.

Somewhere, althought, China is still far behind. For example, an Internet search engine Baidu is considered so undistinguished that it always loses when compared to Google. Moreover, weak financial results of Baidu give evidence of serious problems at the company.

sorce: ft.com