The Next Silicon Valley is China


Also, it is an illusion that China’s rich are immigrating overseas and bringing all their wealth with them. Far from the truth! The businesses of these rich people are still alive and thriving in China. For example, there’s a Chinese restaurant chain magnate who recently bought her citizenship in a Caribbean island country (can’t remember which one), but obviously she wouldn’t be able to move that whole chain over to that island!!!

So, actually it is more like “China’s rich buying citizenship overseas” as opposed to “China’s rich moving all their money overseas”.


[quote=“marcus335, post:32, topic:2735”]
This makes me wonder about the title of this thread. If half the rich leave China, they are going to be contributing to the economic growth somewhere else.
[/quote]The reasons they gave, "Education and pollution are driving China’s rich to emigrate” are BS. Rich are always worried about the government taking their money, legally by tax, corruption and other means.

SV are full of rich folks who retire elsewhere, the engine didn’t stop because of that.


If China wasn’t worried about the rich taking their money overseas, then they wouldn’t have laws limiting it.


A single spark can start a prairie fire. Better to take action earlier, it would be too late when the prairie fire has started.

Also, yuans flowing out of China weakens the yuan which is ok when China is developing but now China wants to transit to a service economy, so need a stronger yuan.


Then there you have it!!! If the laws limited the rich from taking their money overseas, the wealth stays in China!!!


I think you have it backward. People become billionaires because they have the vision and the drive, not the other way around.

All these rich Chinese people who claim they want to leave, why haven’t they left yet? If they have some serious money they can buy their way into Europe or America. No doubt many already have their foreign passports, but they stay in China because that’s a dynamic and fabulous place to make money. A-type personalities want to prove themselves by doing something big, not to sit back on a beach drinking beer.


I agree there is a lot of potential in China. But just being devil’s advocate…

The density mentioned in the video is not unique to China. Japan has high density, though not as big scale as China. And Japanese had big middle class and buying power. But Japan had a boom in 1980’s and now in recession. Maybe 10x people in China will extend the boom 10x longer…

The digital commerce seems to me more like a marketing/business opportunity, not necessarily “silicon valley”. For instance, video mentioned a lot about QR code. Well, QR code was available 20 years ago in Japan. My take from the video is that China is utilizing technologies to create business opportunities, which I think is more important being “silicon


Scale is very important. 10x scale is not just 10x the quantity, it changes the quality of things. Japanese market is not big enough to sustain itself. That is Sony and Toyota need to sell overseas to sustain themselves, but Tencent and Alibaba don’t. Because 1.3B consumers is already a bigger market than US + Europe + Japan. Its income level is not there yet but steadily improving at a rapid pace.

Silicon Valley is more about a rapid-fire Darwinian combination of different tech and business models than pure science type innovation. What is the new tech behind Facebook? Uber? AirBnB? The research type stuff is done in academia. Silicon Valley is all about testing out different combination of this and that and see which one can scale.


There is one big innovation in SV you forgot to mention: electric cars popularized by Tesla.


First of all, think about the Asian mentality. Generally speaking, the folks with the yen are older and they have children. They aren’t necessarily willing to make the move to a new country but they may be planning for their children’s future. Buying places here or investing money here sets up their future generations. Duh!!!


Electric cars were around in the 90’s. It’s just no one cared because:

  1. Gas was cheap so it made zero sense to pay extra money for electric/hybrid cars
  2. The media hadn’t manipulated and misled the public about global warming yet


Personally, I am still finding the current technology pathetic. Come on, my 1991 Honda CRX Si gets over 30 mpg on the freeway. If you have the HF model, I believe that goes over 40 mpg easily. Over 25 years later, the best we can do is maybe averaging mid 20s for most car? I get it, the CRX is small and light, but still…


Yes but could those electric cars of the 90s go from 0 to 65 mph in less than a second?


I agree with jk88cal.
Korea is following what Japan went through with about 10-year delay.
Social phenomena Koreans would never associate with them (such as extremely low birth rate, long recession, losing the momentum of innovation etc) is happening so rapidly. Resemblance between what two countries have been going through is quite amazing to me.
Certainly, China is in better shape due to its population size. However, that large population could be a big burden to even reach the peak time.

Anyway, IMHO, what makes SV so unique is “it is the most desirable location of the world especially for highly talented people”. That includes stable political/social system (we should give full credit to Americans for this), large ecosystem with money, weather, (open-minded) culture, diversity, education level of average citizen and etc.
I understand China has large population with talents.
However, would any city in China be as desirable location as SV for global talents?
I doubt it in the near future mainly because its social/political system and air pollution.

Anyway, it would be interesting to see how some of Chinese cities turn themselves into attractive places to live.


Honestly, the tech was there. They were using it for fuel economy not performance. Now all the exotic car companies are using hybrid technology to improve performance. It works perfectly, since the electric motor can compensate where the gas engine torque curve is weak. That’s some pretty cool CS work to make all of that happen flawlessly.

Today’s cars are much heavier due to safety standards and more electronics. Your car is just under 2,000 lbs. A civic is 2,700-3,100 lbs. The weight hurts fuel economy. Most cars sold today are much bigger than a CRX Si. People want comfort and acceleration. One of the biggest drivers of perception is how a car accelerates.


I’m betting my money on Shenzhen. I think in 10 years time I will sell all my stakes in BA and relocate to that city.


I searched where it is. :slight_smile:
Looks like it is next to HK.
Does it share same culture with HK?
Isn’t it already very expensive?


Yes Shenzhen real estate is getting almost as expensive as Hong Kong. The price gap has narrowed a lot in recent years


See what I mean… Shenzhen is probably the wealthiest city in the world not known to foreigners. It actually is a city that piggy backed off of Hong Kong’s economic might and in some ways stole most of its thunder. Well HK has nothing but itself to blame for that because it hardly welcomed the influx of immigrants, so Shenzhen just developed alongside it and eventually grew to be a metropolis bigger than HK itself.

Today Shenzhen has a GDP almost the same size as HK and per capita income about half as much. Its culture is quite different from HK, with a different language and political system. However, its citizens are much more dynamic and entrepreneurial, and I would argue probably the most amongst all global cities. The concentration of talent in that city is incredible, as it has attracted the best and brightest from all of southern china to work and innovate there.


Very true. That’s where China is most lacking. It’s very xenophobic and quite racist to be honest. Even worse, people from different regions often don’t like each other. The demographic shift will be very bad. One child policy is super idiotic. And then there is censorship. Do you know they ban Winnie the Pooh? Because it looks too much like President Xi…

However, despite all these, China will come close if not overtake the American Silicon Valley. Because we also have our own set of problems. Our infrastructure is crumbling, houses unaffordable to young people, broken political system, etc. It’s not like we are in our top shape.

The fight will be glorious. I love globalization!