Calvin Chin is an American entrepreneur who lives in Shanghai. He founded Qifang, a P2P lending site for Chinese student loans. You can read more about Qifang here. He attended the World Economic Forum in Davos, Switzerland this last week, where China was the center of attention. We asked him to write this guest post and share his unique perspective as an American building a startup in the heart of China.
Here at Davos it seems China keeps coming up in two ways – neither of them positive. One, with the worst of the crisis behind us, people are turning from last year’s hopes of China as economic savior to China as free-rider keeping its currency cheap, bullying its minorities and shirking its responsibilities in Copenhagen. Two, in the tech community, seems everyone is talking about Google, Chinese government hackers and censorship.
My view, and I think it’s one that many in China would probably share, is that while free access to information and the rest of the world is inherently a good thing, so is political stability. The Chinese government has earned a lot of slack for raising hundreds of millions of people out of poverty, and if things did go out of control a heck of a lot of people would get hurt. So even if they want China to be plugged in to the rest of the world to encourage innovation and Chinese tech entrepreneurship (which I think they do), they’d put that priority after getting most Chinese people better lives.
It’s kind of the same deal that Chinese startups all make, to try to do build cool stuff but while working within the system. So Tudou and Youku screen their videos and the fastest growing microblogging service is run by a portal that has the infrastructure from screening blogs to be able to screen tweets. All these companies are making the same decision that Google made to enter China in 2004 too (and stay for now), but for Chinese entrepreneurs they don’t have the option of not being in the China market. It’s what they know and where they have their best shot at success. And I’m sure if you’d ask them, they’d sincerely agree that eliminating poverty and keeping things stable comes way before access to a few articles in a foreign language about events that don’t mean much to them. I don’t think many non-Chinese would like the aggressively patriotic and self-important China that would probably be the outcome of democracy there today anyways.
The Chinese market for startups is growing so fast, is so competitive and is characterized by so many unfair advantages for the big players, that local entrepreneurs just keep their heads down and roll with the political and market changes. Take Digu for instance, they launched as a pretty simple copy of Twitter that focused on celebrity accounts, then pivoted to a social game model when all the startup microblogging platforms got shutdown and Sina (with a lock on celebrity blogs) launched Weibo, and are now back to straight microblogging with a better ability to keep the tweet streams “harmonized.” Digu didn’t whine, they just sucked it up and forged ahead.
This is typical for Chinese startups. Whether they are localizing an international hit, copy-2-china style, at a much cheaper price and a better UI like Kuukie. Or they’re a fit for Chinese net culture with a product that you don’t see elsewhere like Douban’s social network for talking about books (and now other media).
The thing is while the majority of Chinese netizens really don’t care that much about what’s going on outside of China, the ones who do care, people who would start companies, people who want international news, all know workarounds to use services they like or read about sensitive topics from other perspectives. They use Twitter clients like Bage or free (http://hotspotshield.com/) or paid VPNs. So much so that Twitter won in the grassroots Chinamode awards.
So actually, the Chinese government kinda gets the best of all worlds: most Chinese netizens are sufficiently inconvenienced so they’ll never stumble into places they shouldn’t, motivated innovators still find out about, get to, and can track any going on globally, and international companies that would otherwise compete for local market share get locked out.