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https://www.washingtonpost.com/opinions/trump-is-rising-to-the-china-challenge-in-the-worst-way-possible/2018/09/30/b645a00e-c41f-11e8-b338-a3289f6cb742_story.html?utm_term=.10d5ed3c0b2b


Opinions <https://www.washingtonpost.com/opinions>
Trump is rising to the China challenge in the worst way possible

Daniel Zhang, chief executive officer of Alibaba Group, attends the
Computing Conference of Alibaba Cloud in Yunqi of Hangzhou, China, on Sept.
19. (Chine Stringer Network/Reuters)
By Sebastian Mallaby
<https://www.washingtonpost.com/people/sebastian-mallaby/>
September 30 at 7:33 PM
In 1998, the year Google was founded, 2 million
<https://pdfs.semanticscholar.org/4881/088c67ad919da32487c567341f8a0af7e47e..pdf>
Chinese
were connected to the Internet, compared with 83 million Americans. Two
decades on, China has 800 million
<https://www.statista.com/chart/15202/the-number-of-internet-users-in-china/>
Internet
users and is overtaking the United States in areas such as
<https://www.forbes.com/sites/rebeccafannin/2018/06/04/china-mobile-payments-ai-bike-sharing-short-videos-all-make-the-meeker-report/#366139247e75>
drones,
mobile payments, bike sharing and artificial intelligence. Given this sea
change, President Trump’s paranoia about China is understandable. But Trump
is responding to the China challenge in the worst way possible.
The president is right
<https://www.wsj.com/articles/how-china-systematically-pries-technology-from-u-s-companies-1537972066>
that
Chinese courts and regulators collude with Chinese companies to steal U.S.
technology. But as the Taiwanese-born venture capitalist Kai-Fu Lee argues
in a new book
<https://www.amazon.com/gp/product/132854639X/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=washpost-20&creative=9325&linkCode=as2&creativeASIN=132854639X&linkId=d5bfd562d2575de8b502297a71bf4422>,
the larger point is that China has moved far beyond the point of merely
mimicking Western inventions. Even if Trump’s trade war stopped Chinese
technology theft completely, it would not change the most unsettling
aspects of China’s advance.
Lee offers the story of Wang Xing
<https://www.forbes.com/sites/rebeccafannin/2018/09/17/whats-behind-meituan-the-next-china-tech-startup-to-go-public/#75a5112f64df>,
an entrepreneur nicknamed “the cloner,” who was once a poster child for
China’s tech copycats. In 2003, 2005, 2007 and again in 2010, Wang
replicated America’s hottest start-up idea for the Chinese market: His
rip-off of Facebook even featured the tagline “A Mark Zuckerberg
Production.” But Wang has become much more than a cloner. The last of his
ventures, which began as a copy of the digital discount business Groupon,
has expanded into food delivery, hotel bookings and movie tickets. The
upshot is a company, Meituan Dianping, worth
<https://www.scmp.com/business/companies/article/2164966/meituan-dianping-shoots-past-42-top-hong-kong-firms-market-value>
more
than 20 times as much as Groupon
<https://www.google.com/search?q=NASDAQ:GRPN&e=4112296&tbm=fin&biw=1920&bih=1017#scso=_l0uuW-KSNMmdgAagt7TYDA1:1498,_p9avW7SsIs-v_QbEk5LgDw1:0>
..
The same story holds for China’s tech sector writ large. Alibaba began as
“the Chinese eBay,” but it has long since grown beyond online auctions,
spawning the financial services group Ant Financial, the world’s most
valuable <https://en.wikipedia.org/wiki/List_of_unicorn_startup_companies>
privately
held tech firm, or “unicorn.” Tencent began as a Chinese version of AOL’s
instant-messaging service, but now it offers everything from social
networking to online gaming to music. Of the top 10 unicorns listed by
Wikipedia <https://en.wikipedia.org/wiki/List_of_unicorn_startup_companies>,
three are American, one is Indian, and six are Chinese.
Most striking of all, China is poised to win the race in artificial
intelligence, the field Lee entered as a doctoral student at Carnegie
Mellon University three decades ago. The technical breakthroughs behind the
recent AI explosion took place in Canada, the United States and Britain;
China was marginal. But now that the technical innovations are in hand,
China is speeding ahead with the task of implementation. In 2017, Chinese
AI start-ups attracted more venture capital than did their U.S. rivals.
PricewaterhouseCoopers estimates that, by 2030, China will add $7 trillion
<https://qz.com/1015698/pwc-ai-could-increase-global-gdp-by-15-7-trillion-by-2030-with-much-of-the-gains-in-china/>
to
its gross domestic product as a result of AI deployment, nearly double the
bonanza expected in all of North America.
The stakes here are enormous. Artificial intelligence is not a discreet
product class, like social media platforms or ride sharing. Rather, it is
like electricity: a breakthrough that will revolutionize activities from
translating documents to making loan decisions to predicting consumer
behavior. Moreover, because AI requires large data sets, there is a
winner-takes-all tendency that should alarm China’s competitors. Companies
with the most data will have the best products. The best products will
attract the largest number of customers, who in turn will generate
additional data, reinforcing the front-runners’ advantage. And then there
is AI’s military potential
<https://www.wired.co.uk/article/artificial-intelligence-weapons-warfare-project-maven-google-china>:
swarms of autonomous killer drones, new forms of cyberwarfare.
Trump’s strategy of clamping down on Chinese intellectual-property theft
misses the scope of this challenge. As Lee and other venture capitalists
<https://www.ft.com/content/42daca9e-facc-11e7-9bfc-052cbba03425> attest,
China’s AI acceleration is powered by ferociously gladiatorial
entrepreneurs who (as Lee puts it) would send Google employees scurrying
for their nap pods. It is also driven by richer data, reflecting the way
the Chinese use smartphones for everything from booking a doctor’s
appointment to paying for their vegetables. Finally, China’s success is
helped along by AI-friendly infrastructure. The government has plans for
intelligent highways equipped with sensors and solar panels to guide and
power electric self-driving vehicles.
The United States will never match China’s maniacal, frequently unethical,
win-at-all-costs commercial culture. On the other hand, there is nothing to
stop it from investing in smart infrastructure and recognizing the social
gains from rich data before it regulates its tech titans. But the really
obvious imperative is the one that Trump mangles completely: The United
States should make the most of its attractiveness to immigrants. Whatever
China’s progress, most talented people would prefer to live in the United
States — for its intellectual and personal freedom, for the security
afforded by the rule of law, for its culture and its heroes.
Just the other week, the erstwhile cloner Wang Xing celebrated his
company’s initial public offering. He seized on this occasion to thank
<https://www.reuters.com/article/us-meituan-listing-idUSKCN1M00CK?utm_source=34553&utm_medium=partner>none
other than the late Steve Jobs: “Without iPhone, without mobile Internet,
everything we do today wouldn’t have been possible.” The worldwide allure
of American role models gives the United States a unique advantage in
drawing talent to its shores — if only American leaders could bring
themselves to leverage it.
*Read more:*
David Ignatius: The Chinese threat that an aircraft carrier can’t stop
<https://www.washingtonpost.com/opinions/the-chinese-threat-that-an-aircraft-carrier-cant-stop/2018/08/07/0d3426d4-9a58-11e8-b60b-1c897f17e185_story.html?utm_term=.442654df1ed3>
Robert J. Samuelson: China’s breathtaking transformation into a scientific
superpower
<https://www.washingtonpost.com/opinions/chinas-breathtaking-transformation-into-a-scientific-superpower/2018/01/21/03f883e6-fd44-11e7-8f66-2df0b94bb98a_story.html?utm_term=.dd1b131e7705>
Fred Hiatt: China is bent on world domination — but not in the way you think
<https://www.washingtonpost.com/opinions/global-opinions/china-is-bent-on-world-domination--but-not-in-the-way-you-think/2017/05/07/ac05993a-31a1-11e7-9534-00e4656c22aa_story.html?utm_term=.18b9274b5ad3>
Josh Rogin: China is trying to lure Trump into a bad deal on trade
<https://www.washingtonpost.com/opinions/global-opinions/china-is-trying-to-lure-trump-into-a-bad-deal-on-trade/2018/04/26/25a3390e-498f-11e8-827e-190efaf1f1ee_story.html?utm_term=.c245793b7f16>

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