Homepage / Asia / Copycat no more: China's shedding its image with innovation after innovation
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Asia

Copycat no more: China's shedding its image with innovation after innovation

This article is part of a “Reporter’s Notebook” series, wherein CNBC journalists submit tales and observations from the field.

China’s shift from a country that copies ideas from the West to a tech and innovation powerhouse is no longer an aspiration — it’s a fact.

That was the repeated conclusion last week at one of Asia’s largest tech conferences.

“China is changing from the so-called copycat nation to innovation nation,” Jing Ulrich, managing director and vice chairman of APAC at JPMorgan Chase, told audiences at the RISE conference in Hong Kong last week.

China’s rise in technology has been spurred by the emergence of large companies such as Tencent, Alibaba and Baidu that paved the way for other local firms to follow.

Both consumer appetite and government support led to the creation of new industries and the domestic dominance of Chinese firms in existing areas of technology.

For example, a new sector closely watched by investors is China’s massive bike-sharing industry. Though there are several competitors vying for market share, two prominent companies stand out: Mobike and Ofo. They have both raised large chunks of money from local and overseas investors.

JPMorgan’s Ulrich said Chinese companies are also leading in areas including mobile payments, internet finance, drone manufacturing, social media and artificial intelligence.

Part of that success comes from the government’s efforts to drive mass entrepreneurship and innovation. Last month in Dalian, Premier Li Keqiang said in a speech that, in the last three years, more than 15,000 enterprises were registered every day on average and about 70 percent of them were active in business.

Ulrich told CNBC that China’s mass-entrepreneurship drive shows the emphasis was to push “innovation at the grassroots. That’s going to help China go to the next level, in terms of economic development.”

And while the government is key, consumers are also driving technological advances in the country.

Alan Bollard, executive director at the Asia Pacific Economic Cooperation Secretariat, said China is altogether “moving to another zone, particularly driven by this huge middle class which is saying they want a whole lot of new technologies.”

Despite their massive presence in the domestic market, many Chinese tech companies struggle to find strong demand overseas. Outside China, Alibaba and Tencent, for example, face stiff competition from the likes of Amazon and Facebook — both U.S. brands are considered established major players in multiple markets and have amassed a loyal brand following.

When Chinese tech companies arrive in U.S. and European markets, they need to start from scratch, according to Bessie Lee, founder and CEO at Chinese start-up incubator and early stage venture fund Withinlink.

Lee, who was the former CEO of WPP China, contrasted that state of affairs to Chinese tech giants’ dominance at home. “Tencent especially — they’re so powerful in China, people actually line up, take numbers trying to see them, to do business with them because of that powerful status,” she told audiences at RISE, adding that success outside of China for these companies may look very different from their dominance in the domestic market.

While tech companies figure out ways to conquer markets outside China, the mainland also has to grapple with another key issue — jobs. Its massive population requires about a million new jobs every month while Beijing fends off competition from relatively cheaper places like Myanmar, according to APEC’s Bollard.

But China’s domestic market is still an attractive investment prospect for investors looking to ride on the wave of technological developments in the mainland.

In recent years, many Chinese start-ups have seen their valuations rise: Data from CB Insights show more than 50 Chinese companies with valuations above $1 billion. For one, Didi Chuxing, which dominates China’s ride-hailing market, is valued at $50 billion — only behind rival Uber on the global list of “unicorns.”

While some argue valuations for many tech firms are too high, GGV Capital Managing Partner Hans Tung told CNBC that it ultimately comes down to betting on “the right horse.”

“Whoever ends up (becoming) number one in the category wins big because the market’s massive,” Tung said. “So the premium you pay along the way (is) kind of being affected in a positive way by just the growth ahead.”

The key is to be able to pick one of the top two companies to bet on because, Tung explained, those firms often merge to expand their market share. Didi Chuxing was, for example, the result of a merger between two major ride-sharing companies Didi Dache and Kuaidi Dache.

“You see more mergers happening between number one (firm in a sector) and number two so that it becomes easier for someone to take over the market and make money,” Tung said.

Source: cnbc china
Copycat no more: China's shedding its image with innovation after innovation

Comments are closed.