Articles like this are hilarious. Brainwashed fanatics have not stopped publishing "the coming collapse of China" articles.
For the original: https://en.wikipedia.org/wiki/The_Coming_Collapse_of_China
this post was submitted on 13 Sep 2024
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Care to unfold a bit more what's hilarious? Which metrics from the article are wrong or irrelevant for example? You might disagree with the conclusion, and maybe rightly so, but are you saying the data itself, e.g number of companies funded is false? Or it does not matter and something else could help better understand the situation?
you can't argue against the obvious. china is doing fine, and chinese companies are killing it in many sectors. just look at how much american and german car companies are covering in fear at the sight of BYD.
I believe that's precisely the point of the article, that there will be no new BYD which was funded 29 years ago.
nonsense. you hear about a new sexy chinese company every day. just today I learned about Biren, which is taking on Nvdia: https://en.wikipedia.org/wiki/Biren_Technology
This article is basically yet another Gordon Cheng. It's pathetic and hilarious at the same time.
Founded in 2019, right after the peak according to the very graph I highlighted.
Neither I nor the article is saying there are no more startups nor innovation from China. What the article is saying is that it's radically less than 7 years ago. You can still list few amazing Chinese startup from 2023 or 2024 and it would still not make the article "nonsense".
The metrics here are those most relevant to finance, which is not synonymous with innovation. Startups are notorious money sinks that are only invested in due to a promise of monopoly profits later, basically a gamble. They usually fail, and dramatically. Finance is necessary for private capital investment and liquidity but when it grows too large it becomes parasitic and also tries to dictate policy. The real estate bubble that China is now dealing with is a direct result of financialization and an expectation that it would be "too big to fail" and that real estare finance would get bailed out by government.
China is tackling this issue by limiting the impact of finance on its economy, changing its lending terms and what it guarantees, including not bailing out real estate finance. This has the direct effect of making startups and venture capital less common as they simply can't make as much money from pure speculation. They don't have a state-funded safety net for their worst gambles and interest rates are higher.
Overall, this is a good development. China's finance sector absolutely needed to be limited and it is good for the state to take on a greater role in running companies.
Thanks for the in depth clarification and sharing your perspective.
this is a good development
Keeping finance in check is indeed important so I also think it's good.
What about the number of funded startups though and the innovative products they would normally provide customers? Do you believe the measures taken will only weed out bad financiers or will it also have, as a side effect, to bring less products and solutions out? Does it mean research will remain academic but won't necessarily be commercialized or even scaled? If you believe it will still happen, how? Through state or regional funding and if so can you please share such examples that grew for the last 5 years?
I think innovation will happen more through universities and existing large companies. Most research and innovation happens through universities anyways and China is currently having an academia boom.
Companies like Huawei are way up, and domestic consumption is slowly rising.
Research happens through university, absolutely, and selling products at scale through large companies, but that's not innovation. Innovation is bringing new products, that is often the result of research yes, to market. Large companies tends to be innovative by buying startups. If there are no startups coming from research coming from universities to buy, I don't see how large companies, often stuck in the "innovator dilemma", will be able to innovate.
Having seen and done this transition I can tell you that companies do very little for innovation compared to university researchers. Companies are exclusively focused on profit, they don't do the five to ten year moonshot project unless they are already a massive corporation, not a startup, and even then the massive companies want the easiest thing to translate to a product and begin making money. At best they have engineers that make scaling up more practical, and while that is a fun and interesting thing, it is also very straightforward and is something a company has to avoid screwing up, not investing in massively to make it right.
I've seen several companies that did literally nothing except swap a couple things on their production line and call it a day. The only transition from research to industry was an IP agreement and a few meetings.
Large companies are not looking for innovation by buying startups, they are usually looking to secure monopolies. Sometimes they want the product and to work it into their own product offerings. This is often a way to vertically integrate more, not innovate. They bring in-house because they see a competitor emerging and want to hedge their bets or because they see a way to take over a market by just doing the same thing. Sometimes it is just a way to hire some employees that seem pretty competent and thereby deprive your competitors. Large companies operate with a monopoly mindset. This is also why Google kills every project that they declare won't scale into a huge money-maker (they really mean take over a market).
Small companies are often started with the plan of actually making and selling their product long-term but run headfirst into the fact that their industry is dominated by just 3 companies that will gladly do the one-two punch of threatening to bleed you legally with nonsense lawsuits while offering to buy you up. Or, on the flipside, just copying your work and changing it just enough that they know they could bleed you legally even though they have broken IP law. Usually, they would rather just buy you out at less than you are worth but enough to make the VCs happy.
I... agree but isn't then contradicting your previous point that innovation will come from large companies if they only try to secure monopolies rather than genuinely innovate? I don't understand from that perspective who is left to innovate if it's neither research (focusing on publishing, even though having the actual novel insight and verifying that it does work), not the large companies... and startups don't get the funding either. Sorry if you mentioned it but I'm now confused as what is left.
I... agree but isn't then contradicting your previous point that innovation will come from large companies if they only try to secure monopolies rather than genuinely innovate?
Nope.
I don't understand from that perspective who is left to innovate if it's neither research
Who said there's no more research?
not the large companies... and startups don't get the funding either.
Both are, on average, just doing boring work minorly translating research in the hope to become more monopolistic, just at different levels of the good chain. The former eats the latter.
It also looks like these numbers might not even be accurate: https://nitter.privacydev.net/NuryVittachi/status/1834747250666508679
I would expect a decrease in VC startups based on the way China is tackling finsnce, though.
Thanks for linking to criticism but can you highlight which numbers are off? I can see things about ByteDance, Ant group, Shein but that's irrelevant as it's not about the number of past success, solely about the number of new funded startups. Same as the CEO of ITJUZI sharing his opinion, that's not a number.
Edit: looks totally off, e.g "restaurants, in a single location, such as one city, you could immediately tell that there were large numbers of new companies." as the article is about funding, not a loan from the bank at the corner of the street.
The source of their data says they were using it incorrectly, that it simply does not mean what they reported. I have not gone into exactly what their data is, just that it was reported as total new funded startups and the data provider says, "that's not what this is".
They just provide the data. They can question the methodology or even provide another report with a different methodology but if the data is correct (namely no fabricated) then it's not up to them to see how it's being used. The user can decide how they define startup, i.e which minimum size, funding types, funding rounds, etc. Sharing their opinion on the startup landscape is unprofessional IMHO. They are of course free to do so but to me it doesn't question the validity of the original report.
It is of course up to data providers to say when it's being used incorrectly. They can do that whenever they want to. Why couldn't they? It is in no way unprofessional to call out bullshit.
tl;dr: Debate me, bro!
The private sector is ceasing to be China's primary driver of growth, with that role year after year being further taken up by the state. Diminishing private funding is obviously not good, but it does align with their goal of reaching socialism by 2050. We'll see how their economy does from now on...
I know there is a lot of "the collapse of China lol" takes but the middle income trap is a real danger.
If your country doesn't move to a consumption based economy you're gonna have a bad time.
Please clarify, as I asked in https://lemmy.ml/post/20245112/13688624 I don't see how that's relevant. They are sharing opinions from startup CEO or numbers that are about large "old" (much earlier than the boom, e.g Ant, Shein, ByteDance). That's certainly interesting but does not contradict figures from the article.
Capitalists gonna capitalism.
Good lmao