All About the US-China Rivalry 🇨🇳🇺🇸
Today: Europe being caught between the US and China is a recurring topic of this newsletter. Here’s an overview.
The Agenda 👇
The rise of Chinese tech and the related lessons
How our perception of China is changing
Why it’s important to get to know China better
By the way, America is changing, too
Not sure if the incoming Biden administration will change that
I’ve long been interested in the rise of Chinese tech, as explained last year in Europe Is a Developing Economy (October 2019)
Why is Chinese tech so important for us Europeans? There are two things that struck me while reading about it and travelling there.
First, the fact that the US and China have now become rival tech superpowers forces Europe to do some strategic positioning.
The other important thing is that China became a tech superpower using a very different playbook than that of the US—and it’s really worth our European attention.
Lately, however, it’s become difficult to think about tech companies in China without having in mind the rivalry between the US and China on many levels—technology included. To frame my own reflections on this matter, the starting point was writing two long-form essays on each protagonist:
The context of China as a foe was rather new to me, as I explained in My Personal Journey with China (August 2020):
The events currently unfolding around China and affecting its relationship with the rest of the world are forcing us all to reassess our perspectives on the state of things. I find it especially difficult in this case because China has long inspired cognitive dissonance in Western minds. You’re never really sure if you should admire it, fear it, fight it, or just ignore it. And the signals we receive from our immediate environments are mixed at best.
And so many things that happened this year have contributed to widening the gap between China and the West, as explained in China Drifting Away? (May 2020):
For all of us who’ve come up in a period where China was treated, if not as an ally, at least as a partner in boosting global economic growth, this is a radical change. I would never rejoice in China collapsing (actually, I happen to think the rise of China is a good thing for us Europeans), but all of us—nations, firms, and individuals—need to reposition themselves in a world that grows more fragmented by the day. (About that, have a look at my Big Tech in a Fragmented World.)
Donald Trump’s (failed) attempt to ban TikTok from the US (or force a sale to a US investor) has been a major story in global technology since August. I covered it across three essays:
All About the TikTok Ban (August 2020)
China Saving Face on TikTok (September 2020)
What the US and China's tussle over TikTok means for Europe (in Sifted—October 2020)
Another factor in the heating up of the rivalry is the Chinese Communist Party becoming more confrontational in its approach, as seen with what happened to Ant Financial’s botched IPO—which I covered in Jack Ma's Future (November 2020):
The Chinese model of building large tech companies is one of the benchmarks we in Europe need to understand if we want to find our own way. We might be shocked by China’s authorities preventing Jack Ma from listing his company; yet at the same time, the whole world, starting with Europe, seems to be converting to the Chinese approach to implementing the transition to the Entrepreneurial Age.
I think this should encourage us to try and know China even better. To that effect I shared A Primer on the Chinese Communist Party (September 2020):
The CCP is a good starting point for understanding China. Xi Jinping is often depicted as “President of the People's Republic of China”. But those who know China well are happy to recall that Xi's most important function is that of “Secretary General of the CCP”. In China, the Party takes precedence over the state, and local politics are much better understood through the prism of the CCP and its cadre than of the state government and those who lead it.
And I wrote in detail about China’s approach to industrial policy, which I think should inspire us. See Industrial Policy: China Gets It, We Don't (October 2020):
China is doing everything right: they have the drive from both a government focused on building and very large downstream tech companies that are racing ahead of the technological frontier. They also have the means to invest in basic research and the Communist Party providing a capacity to coordinate the efforts between the private and public sectors and ensure that the direction is clear for everyone (and that it serves China’s strategic interests relative to the rest of the world).
The rise of China also reveals the growing importance of Asia as a market, including for European tech companies. I wrote two rounds on that:
Should European Founders Look to the East? (October 2020)
Another Round on Expanding in Asia (November 2020)
All that was on China and Asia, but you can’t understand the rivalry if you don’t also pay attention to what’s changing in America, which I did in several essays (and a reading list):
Is Being American Worth It Anymore? (September 2020)
Europe Is a Base, America Is a Destination (October 2020)
🇺🇸 A Reading List on America (November 2020)
I share conflicting perspectives on how America is doing on the technological front—one view is that it’s bound to lag behind now that it’s become more inward-looking, the other is that it will continue to race ahead anyway, as suggested by some recent trends:
America As a Technological Laggard (November 2020)
America As a Technological Champion (November 2020)
Finally, let me share the list of all essays I wrote about the US presidential election and the consequences of Biden’s victory, especially from a Silicon Valley perspective:
What Trump Did to Silicon Valley (October 2020)
Kamala Harris and the Future of Silicon Valley (August 2020)
Is Trump Still in the Flow? (September 2020)
Inflection Points in Silicon Valley Politics (October 2020)
What Becomes of America (and the World) (November 2020)
Where Are America's Wise Men & Women? (November 2020)
What Biden means for European tech and startups (November 2020—in Sifted)
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From Munich, Germany 🇩🇪