The logic driving China’s big tech clampdown(asiatimes.com)
asiatimes.com
The logic driving China’s big tech clampdown
https://asiatimes.com/2021/07/the-logic-driving-chinas-big-tech-clampdown/
6 comments
Worth noting that we have different incentives in the US even accounting for different philosophies.
US big tech is globally influential, clipping their wings would reduce that influence. Chinese big tech is generally more about the large Chinese market and diaspora.
US big tech is globally influential, clipping their wings would reduce that influence. Chinese big tech is generally more about the large Chinese market and diaspora.
TikTok has quite a bit of influence outside China. So it seems that Chinese big tech can compete quite effectively in a global market.
So why did TikTok come out of China and not the US? Maybe it is because the monopoly of Facebook is too strong for alternatives to flourish.
Point is: Even-though American big tech’s dominance is an US advantage, the monopolies still come at a cost.
Point is: Even-though American big tech’s dominance is an US advantage, the monopolies still come at a cost.
TikTok did, but none of the others except for maybe Alibaba made it. Tiktok is also popular outside of China with a product different from inside China (Douyin) that they acquired from another company after tiktok was released.
Would we want a similar crackdown from the duopolistic political side?
The Chinese government can move quickly and decisively because it doesn't have any checks or balances. The US would benefit from a system in which (a) there are clear rules for competition and (b) those rules are enforced, even-handedly; but it's harder than you think to get to that point.
The Chinese government can move quickly and decisively because it doesn't have any checks or balances. The US would benefit from a system in which (a) there are clear rules for competition and (b) those rules are enforced, even-handedly; but it's harder than you think to get to that point.
It's not like this crackdown is about the CCP's concern for protecting user data and preventing monopolies. It's just a turf war over the data and in a larger sense over control of the direction of the country.
Same reason Jack Ma went (extremely) conspicuously missing last fall.
CCP wants the economic growth and international prestige that a burgeoning tech sector provides, but does not want anything resembling the system we have where facebook can tell the White House to take a hike. https://www.nytimes.com/2021/07/17/technology/facebook-vacci...
Same reason Jack Ma went (extremely) conspicuously missing last fall.
CCP wants the economic growth and international prestige that a burgeoning tech sector provides, but does not want anything resembling the system we have where facebook can tell the White House to take a hike. https://www.nytimes.com/2021/07/17/technology/facebook-vacci...
I find it interesting that the paper does not mention other potential motivations for the changes and seems to take the CCP's statements at face value. Maybe they are simply directly reporting on what has been stated, but it does make sense that the CCP is concerned about the shifting power of control. I think this has little to do with privacy and protections of peoples' rights and everything to do with a tug of war happening above the citizens heads.
It's hard to run a country if you make public policy announcements that don't reflect what you want. Even if you tell your inner circle not to take the policy seriously, there'll be a lot of outsiders taking it at face value, especially in a country with more than a billion people. Based on what they heard coming from the central government, various municipalities are working on stricter laws (e.g. Shenzhen's new data regulations http://www.szrd.gov.cn/szrd_zlda/szrd_zlda_flfg/flfg_szfg/co... ) and economic publications are talking about the potentially astronomic fines and steps compliance departments are taking to manage that risk https://mp.weixin.qq.com/s/bAbyNyg4FZSsbrY9he5BkA
Sure would be a bummer if the government didn't really mean it that way, but companies end up improving their data management practices anyway.
Sure would be a bummer if the government didn't really mean it that way, but companies end up improving their data management practices anyway.
I think that the article is implying all of that without saying so directly (maybe trying not to be banned in China). They refer at several points to the government's fear of companies having more data on people than the government does, making clear that this is about maintaining control and power.
I was mystified by the Ant crackdown until recently. Charlie Munger (Berkshire Hathaway VP) thinks it makes a lot of sense. https://www.reuters.com/business/finance/berkshires-munger-s...
That’s article has zero content other than a couple quotes from Munger that say nothing more than “I agree”.
Agree with what?
Agree with what?
> The CCP is obsessed with data – so much so that it was recently dubbed a “factor of production” alongside land, labor, capital, and technology
I've never thought of data in these terms. Makes a lot of sense for the 21st century.
I've never thought of data in these terms. Makes a lot of sense for the 21st century.
Clearly China wants to use other markets but tries to avoid becoming a market be it education or social platforms. Very clever strategy I'd say
It's called mercantilism, and is a well-worn strategy. The US used it against the UK, who had used it against the Dutch before them, and the Germans had also used it against the UK.
This website "Asiatimes" is, despite the name, almost wholly authored in US, and London.
I cannot understand the Western desire to always rationise, and overthink actions of "smart, sophisticated Asian regimes." It's now almost a trope of some kind.
Some times the Occam's Razor explanation of events is the one which is true, and in this case it's the extremely vindictive regime just ruining lives, and fortunes of people whom they think are good targets to attack today, and there is nothing "smart, and sophisticated" about it.
I cannot understand the Western desire to always rationise, and overthink actions of "smart, sophisticated Asian regimes." It's now almost a trope of some kind.
Some times the Occam's Razor explanation of events is the one which is true, and in this case it's the extremely vindictive regime just ruining lives, and fortunes of people whom they think are good targets to attack today, and there is nothing "smart, and sophisticated" about it.
>Some times the Occam's Razor explanation of events is the one which is true, and in this case it's the extremely vindictive regime just ruining lives, and fortunes of people whom they think are good targets to attack today, and there is nothing "smart, and sophisticated" about it.*
I don't understand how an explanation built up on tropes is the simplest one. One what basis is the CCP "extremely vidictive"? How is the simplest explanation that the government decided to blow up the economy "just because". Your explanation seems very counter intuitive - in some way you take the opposite view as your criticism; reducing the chinese to some barbaric government system, and not the world 2nd largest super power.
I don't understand how an explanation built up on tropes is the simplest one. One what basis is the CCP "extremely vidictive"? How is the simplest explanation that the government decided to blow up the economy "just because". Your explanation seems very counter intuitive - in some way you take the opposite view as your criticism; reducing the chinese to some barbaric government system, and not the world 2nd largest super power.
> in some way you take the opposite view as your criticism; reducing the chinese to some barbaric government system, and not the world 2nd largest super power.
China became world's 2nd largest economic power because money were almost raining on them from the sky, and not because of any level of sophistication.
Were they actually trying to play a better role beyond basic technocratic guidance, China wouldn't be a 2nd largest economy today, but a 1st one, and by a large extend.
With them seeing that the West was willing to pour money on them even when they were failing as hard as they did, they had not a single incentive to not to blow up the economy "just because", as you said, every few years, and being anything else than this "barbaric government system."
The extend of economic mismanagement during the so called "China's golden decade" was just that bonkers. 10, 11 digits sums were going up in flames, or vanishing in Swiss bank accounts almost monthly back then.
It's only when it got so bad as it is now economically, did the CPC turn on the current crisis mode. It is now slowly reverting to its pre-199x state — the perpetual crisis. It will be becoming increasingly more paranoid as the situation deteriorates, and increasingly more panic prone. The history shows that's how it was with every marxist, communist, or hardcore socialist regime in the past.
China became world's 2nd largest economic power because money were almost raining on them from the sky, and not because of any level of sophistication.
Were they actually trying to play a better role beyond basic technocratic guidance, China wouldn't be a 2nd largest economy today, but a 1st one, and by a large extend.
With them seeing that the West was willing to pour money on them even when they were failing as hard as they did, they had not a single incentive to not to blow up the economy "just because", as you said, every few years, and being anything else than this "barbaric government system."
The extend of economic mismanagement during the so called "China's golden decade" was just that bonkers. 10, 11 digits sums were going up in flames, or vanishing in Swiss bank accounts almost monthly back then.
It's only when it got so bad as it is now economically, did the CPC turn on the current crisis mode. It is now slowly reverting to its pre-199x state — the perpetual crisis. It will be becoming increasingly more paranoid as the situation deteriorates, and increasingly more panic prone. The history shows that's how it was with every marxist, communist, or hardcore socialist regime in the past.
> Were they actually trying to play a better role beyond basic technocratic guidance, China wouldn't be a 2nd larger economy today, but a 1st one, and by a large extend.
You know China is on track to surpass the US’ GDP in the 2030s, right? And that the Chinese middle class is growing while the US middle class is shrinking? Given that China was a completely impoverished agrarian country recovering from multiple colonial incursions in 1949, that’s a pretty remarkable accomplishment.
If no sophistication was involved, why hasn’t India seen the same outcomes since gaining its independence around the same time?
You know China is on track to surpass the US’ GDP in the 2030s, right? And that the Chinese middle class is growing while the US middle class is shrinking? Given that China was a completely impoverished agrarian country recovering from multiple colonial incursions in 1949, that’s a pretty remarkable accomplishment.
If no sophistication was involved, why hasn’t India seen the same outcomes since gaining its independence around the same time?
“On track” doesn’t mean much and based on population size, an equal GDP means 25% of GDP per capita which doesn’t sound quite as impressive.
> If no sophistication was involved, why hasn’t India seen the same outcomes since gaining its independence around the same time?
Because the West wasn't raining gold on India, and was raining gold on communist China instead.
And it didn't because India wasn't willing to let in Western businesses, and give them a carte blanche to make money like China did.
It also didn't because India wasn't starting from such a low base as China.
It also didn't because Indian workers were a few cents per hour more expensive than Chinese.
It also didn't because Indian workers had some absolutely minimal labour protections, unlike Chinese.
It also didn't because India had some absolutely minimal semblance of rule of law, functioning legal system, and China didn't.
It also didn't because India wasn't as completely open to corruption as the Chinese state was.
The point that India was a more bureaucratic country than China back then can't hold water. Both countries were bureaucratic nightmares, and keep being them to this day, but for some reason this trope persists.
As somebody who spend a big portion of my career in China, I will tell that China at no point was that libertarian capitalist paradise that the delirious Wall Street, and Silicon Valley people imagined it be.
Because the West wasn't raining gold on India, and was raining gold on communist China instead.
And it didn't because India wasn't willing to let in Western businesses, and give them a carte blanche to make money like China did.
It also didn't because India wasn't starting from such a low base as China.
It also didn't because Indian workers were a few cents per hour more expensive than Chinese.
It also didn't because Indian workers had some absolutely minimal labour protections, unlike Chinese.
It also didn't because India had some absolutely minimal semblance of rule of law, functioning legal system, and China didn't.
It also didn't because India wasn't as completely open to corruption as the Chinese state was.
The point that India was a more bureaucratic country than China back then can't hold water. Both countries were bureaucratic nightmares, and keep being them to this day, but for some reason this trope persists.
As somebody who spend a big portion of my career in China, I will tell that China at no point was that libertarian capitalist paradise that the delirious Wall Street, and Silicon Valley people imagined it be.
My point is absolutely not that India was more bureaucratic. The decisive difference is that China was reestablished as a people’s republic led by a communist party which organizes the whole sphere of the economy to improve the overall standard of living. So now China has eliminated absolute poverty whereas India is still struggling to provide basic food security.
> The decisive difference is that China was reestablished as a people’s republic led by a communist party
The communist party doesn't lead.
Its political edicts are a complete mumbo jumbo. Tell me of a single sane person who can decipher any meaning from the phychomumbling of party heads on CCTV. Even CPC members themselves have barely any understanding what the hack their own party line is.
> which organizes the whole sphere of the economy to improve the overall standard of living.
The communist part did not organise anything, it literally been doing nothing except floating belly up on the water 20 years straight from 1990 to 2010, while Western money kept piling on them.
I will not deny that some state companies attained a level of commercial success, and that some select municipalities had moderately competent hired hands working for them. But this was hardly a result of any deliberate effort.
> China has eliminated absolute poverty whereas India is still struggling to provide basic food security.
You have to say it's Chinese people who eliminated the absolute poverty, and not the talking head only showing in a village for a few hours once a few weeks to deliver ideological sermons from a loudspeaker.
Saying the opposite would be an insult to ones intelligence when it's the party, and especially local party heads, which consistently keep rural people downtrodden.
The communist party doesn't lead.
Its political edicts are a complete mumbo jumbo. Tell me of a single sane person who can decipher any meaning from the phychomumbling of party heads on CCTV. Even CPC members themselves have barely any understanding what the hack their own party line is.
> which organizes the whole sphere of the economy to improve the overall standard of living.
The communist part did not organise anything, it literally been doing nothing except floating belly up on the water 20 years straight from 1990 to 2010, while Western money kept piling on them.
I will not deny that some state companies attained a level of commercial success, and that some select municipalities had moderately competent hired hands working for them. But this was hardly a result of any deliberate effort.
> China has eliminated absolute poverty whereas India is still struggling to provide basic food security.
You have to say it's Chinese people who eliminated the absolute poverty, and not the talking head only showing in a village for a few hours once a few weeks to deliver ideological sermons from a loudspeaker.
Saying the opposite would be an insult to ones intelligence when it's the party, and especially local party heads, which consistently keep rural people downtrodden.
Mumbo jumbo? I’ve read the CPC’s latest five-year plan, and it seemed pretty clear and concrete to me. Anyone interested can do the same: https://docs.google.com/document/d/e/2PACX-1vQEtwcbYa9hTqs7y...
Based on my research into China’s poverty alleviation program I can only say you’re completely misrepresenting it. It’s a wide-ranging effort that includes the CPC building infrastructure, hospitals, and schools in the far reaches of the country. Of course you’re right it’s something all Chinese people should be proud of.
Based on my research into China’s poverty alleviation program I can only say you’re completely misrepresenting it. It’s a wide-ranging effort that includes the CPC building infrastructure, hospitals, and schools in the far reaches of the country. Of course you’re right it’s something all Chinese people should be proud of.
The people's republic was established in 1949 without improving the standard of living much for the next three decades. Then Deng Xiaoping came along and abondoned organizing the whole sphere of the economy in favor of letting companies produce as much as they could sell. And the US right across the Pacific ocean happened to be very happy to buy cheap goods en masse. Without that foreign money pouring in, it would've been much harder to pay for all that poverty alleviation.
India, too, has had Five Year Plans, but they don't seem to have helped that much. If they could get foreigners to give them more money, though...
India, too, has had Five Year Plans, but they don't seem to have helped that much. If they could get foreigners to give them more money, though...
I think India is torn apart by its own racial and religious problems, not to mention the notorious caste system, but that's story for another chapter
In the very least, the Chinese gov, at Mao's time or at Deng's time tried to provide general welfare and equity to all of its citizens. Even though Mao's delusional thinking resulted from perhaps old age made that dream impossible and left the coutry iredemmable damaged til Deng.
In the very least, the Chinese gov, at Mao's time or at Deng's time tried to provide general welfare and equity to all of its citizens. Even though Mao's delusional thinking resulted from perhaps old age made that dream impossible and left the coutry iredemmable damaged til Deng.
India is much more diverse, including at a genetic level. The Han Chinese are one people, whereas Indians are clustered in hundreds of populations of around 3 million that have managed a higher level of endogamy than Ashkenazi Jews for over 3 millennia:
Source: chapter 6 of "Who We Are And How We Got Here" by David Reich.
Source: chapter 6 of "Who We Are And How We Got Here" by David Reich.
“We welcome foreign investment and advanced techniques. Management is also a technique. Will they undermine our socialism? Not likely, because the socialist sector is the mainstay of our economy. Our socialist economic base is so huge that it can absorb tens and hundreds of billions of dollars’ worth of foreign funds without being shaken. Foreign investment will doubtless serve as a major supplement in the building of socialism in our country. And as things stand now, that supplement is indispensable. Naturally, some problems will arise in the wake of foreign investment. But its negative impact will be far less significant than the positive use we can make of it to accelerate our development. It may entail a slight risk, but not much.” — Deng Xiaoping
I’m sure you know better though.
I’m sure you know better though.
Thank you for the nice quote. You seem to think it contradicts what I said, but I don't see it that way. The importance of foreign investment was exactly my point.
Maybe because I said that he "abondoned organizing the whole sphere of the economy"? But the economy is no longer 100% state-owned like it was in 1978, is it not? (I'm having trouble finding reliable figures, but I vaguely recall it being around 40% of GDP nowadays.) Of course GDP has grown 40x since then, so even just 40% of that represents 16x growth and Deng wasn't wrong about the socialist sector benefiting from foreign investment. It's just that the private sector grew even more.
Maybe because I said that he "abondoned organizing the whole sphere of the economy"? But the economy is no longer 100% state-owned like it was in 1978, is it not? (I'm having trouble finding reliable figures, but I vaguely recall it being around 40% of GDP nowadays.) Of course GDP has grown 40x since then, so even just 40% of that represents 16x growth and Deng wasn't wrong about the socialist sector benefiting from foreign investment. It's just that the private sector grew even more.
That doesn't mean the sphere of the economy isn't being organized, though. Deng's reforms were just a new stage of that development.
Really sounds like you are just letting your prejudice guide you, instead of trying to find out what is going on.
https://insider.techbuzzchina.com/c/policies-and-regulations...
1. Companies burning money in an effort to scale up and obtain a monopoly.
2. Using human weaknesses to design products and acquire traffic.
3. Monopolistic online platforms taking asymmetric measures to collect information from users and infringing on their privacy.
4. Discriminatory pricing.
Sometimes I wonder whether we in the west are capable of doing a similar crackdown? Or we have past the point of no return and companies like Facebook, Google, Amazon etc. are simply too powerful and too politically influental?