AUDIO: Prepare now for the Chinese economic dragon
August 25, 2008
• China is rapidly growing its high tech research
• ‘China is moving from a low cost manufacturing nation’
Americans got a glimpse of what is expected to be the 21st Century’s strongest economy during the coverage of the Olympic Summer Games in Beijing.
But what wasn’t shown in the travelogue-like reports from network and local anchors is a rapidly building high tech knowledge industry.
Journalist Rebecca Fannin, who specializes in covering the business developments in Asia, especially, China, says building much like lava beneath the earth’s crust is a new Silicon Valley, fueled by many of the same venture capitalists who put up the money for California’s Silicon Valley.
She put her research into a new book, “Silicon Dragon ? How China is Winning the Tech Race” (McGraw-Hill, 2008).
“I think China is moving from a low cost manufacturing nation to more of a high tech inventive nation, says Ms. Fannin. “This drive is being pushed by the Chinese government because they don’t always want to be known as the low cost produce of products that show up on Wal-Mart shelves.”
An example is Lenovo Group Limited, the world’s largest maker of personal computer and with the Chinese government owning 49 percent.
“They did buy the IBM PC business, but they’ve innovated on top of that,” says Ms. Fannin.
She notes that Chinese companies are rapidly establishing competitive positions in such diverse areas a home appliances and Internet switching and routing equipment.
“So we’re beginning to see even multi-national tech brands come out of China aside from them that are really small and in startup phase right now,” she says.
(Listen to Ms. Fannin’s observations about the emerging China as a business competitor to the U.S. in today’s CVBT Audio Interview. Please left-click on the link below to listen or right-click to download the MP3 file to your computer or mobile media device.)
The American public seems aware of the Chinese competition.
A CNN poll release Aug. 4 says most Americans think China is an economic threat to the United States.
“Seventy percent of those questioned in a CNN/Opinion Research Corp. poll … said China is an economic threat to the United States,” CNN reported.
But Ms. Fannin says U.S. business needs to have China on its radar screen, especially since China is now attracting more venture capital than the United States.
“It used to be that all the venture capitalists were looking for the next new thing out of Silicon Valley or Boston or Austin or maybe Seattle,” she says. “But now they’re all over in China … and they’re spending a lot of money looking for new ideas.”
Ms. Fannin says the just-ended Olympic games, which saw the U.S. and China dominate all other nations, are symbolic of the economic race between the United States and China.
“It’s just China and the U.S. It’s sort of symbolic of what we are seeing now – this economic race between these two nations,” says Ms. Fannin.