Understanding the Rise of Tech in China

How should global business leaders approach the meteoric rise of technology in China? Some observers in the West have taken a zero-sum, us-versus-them approach, whereas others view the Chinese tech industry’s growth more optimistically, arguing that the development of new technologies anywhere can benefit people everywhere. Both mindsets are understandable—but either one can be taken too far. To be effective, leaders must take a more measured approach. Five recent books explore these competing narratives, shedding light on China’s transformation into a global tech leader, the areas in which the country still lags, and how leaders can navigate the tensions between embracing positive technological progress and mitigating the very real geopolitical risks that may accompany it. Any discussion of tech in China would be incomplete without considering Tencent, the company behind WeChat (the superapp that serves as a home base for social media, payments, gaming, and other functions for more than one billion monthly active users). The speed and scope of Tencent’s growth since its founding, in 1998, can be difficult to comprehend—but the journalist Lulu Chen’s Influence Empire: The Story of Tencent and China’s Tech Ambition takes us behind the curtain to share the story of CEO Pony Ma, who rose from humble beginnings to head a global behemoth. Chen describes a shy, geeky programmer, nervous about talking in front of crowds but driven to spend innumerable sleepless nights striving to overcome every hurdle on the path to success. Some of those obstacles, such as aggressive government censorship and unexpected regulatory shifts, are no doubt specific to the Chinese context. But Chen’s compelling and relatable narrative depicts Ma as “temperate, stoic and almost irritatingly self-aware…a quiet but doggedly persistent force who rallies people, many of whom he considers smarter by his own account, to undertake his vision.” Her portrait serves as a powerful reminder that the West has no monopoly on inspirational entrepreneurs. Of course, the story of tech in China is also one of shifting political and economic realities. In The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology , the financial researcher Martin Chorzempa examines how those forces informed the growth of both Tencent and its rival Alibaba—and especially their development of digital payment systems. He asserts that an underdeveloped financial infrastructure and lax regulatory stances in the early 2010s opened the door for game-changing innovation that catapulted China from a cash-only economy to the world leader in mobile payments, leaving the West to play catch-up. But he also notes that the Chinese government has more recently reasserted control over those tech giants, illustrating how digital money—which many envision as a liberalizing force—can also be used for surveillance and control. Ultimately, Chorzempa suggests that China’s vision of fintech as a system designed to be “protective above all of the state’s sovereign prerogatives and centralized power to monopolize money provision, supervise the financial system, and surveil its population” is fundamentally at odds with the social values of the United States and other liberal democracies, posing a major challenge to any Western attempts to replicate China’s rapid growth in the sector. The corporate strategist Handel Jones draws on his four decades of experience in tech and defense to paint a similar picture regarding artificial intelligence in When AI Rules the World: China, the U.S., and the Race to Control a Smart Planet . He argues that its unique regulatory and economic context has enabled China to far surpass the West in AI applications as wide-ranging as health care, virtual reality, and self-driving cars. “China,” he writes, “with its longer-term goals and ability to turn those goals into reality, had a distinct advantage over a system driven solely by market forces.” Jones concludes that “the United States simply has no master plan” guiding its development of critical AI capabilities. As a result, he writes, “by 2030, China will be firmly ahead of the United States in AI. In 2040, major parts of society will be under the control of AI, and it will be too late.” Although both Chorzempa and Jones frame China’s growth largely as a threat to the West, that’s not the only possible interpretation. In Chip War: The Fight for the World’s Most Critical Technology , the economic historian Chris Miller suggests that when it comes to semiconductors—the critical component underlying all digital technologies—the West may still have the upper hand. He describes China as “staggeringly reliant” on chips designed in Silicon Valley and produced in the United States and allied countries, leaving “all of [its] most important technology [resting] on a fragile foundation of imported silicon.” In response, China has been trying to ramp up domestic production—but Miller says that with the world still so dependent on a core technology whose supply chain is “full of choke points,” continued international cooperation is in everyone’s best interest. He notes, for example, that a major military conflict in Taiwan (home to the biggest chipmaker) could lead to such mutually assured economic destruction that it’s unlikely to happen. In The Power of Crisis: How Three Threats—and Our Response—Will Change the World , the political scientist Ian Bremmer agrees that the United States and China both have “too much to lose from catastrophic collision.” He acknowledges a variety of technology risks—from the “splinternet” that separates Chinese users and the rest of the globe to China’s increasing investment in AI-enabled weapons and cyberwarfare capabilities that could alter the balance of military power—but ultimately expresses a cautious optimism that the global community will find a way forward that embraces “practical cooperation,” progress, and peace. Bremmer concludes that disruptive technologies are creating risks that “no nation can address alone” and therefore that “the aim here is not to ‘defeat’ China but rather to encourage it to work with the rest of the world.” Whether you view it as a threat or an opportunity, the growth of tech in China is undeniable. Western political and business leaders cannot afford to take a blindly negative or positive attitude toward—much less ignore—it. Instead they must work to understand and meaningfully engage with the Chinese tech world—or risk being left behind.

Understanding the Rise of Tech in China

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