This book is based on a series of financial magazine articles from about 2006 treating young Chinese
entrepreneurs in the
IT field. Fannin congratulates individuals who have taken “Silicon Valley” business concepts and adapted them to China noting that they have outperformed their forbears in China. It is sort of a “beat them at their own game” story but in most cases the Chinese businesses are so new it is hard to predict any market loyalty when the novelty wears off. The author cannot be blamed for writing such a book. It is what a numerous, overconfident and imperfectly educated readership hungry for exotica want. To her credit Fannin indicates that often there are clouds behind the silver lining and that many of the young Chinese
entrepreneurs may fail for the same very human and inescapable reasons others have always failed and will always fail. The author could have engaged in a more profound analysis of her subject, but I suspect at the loss of a significant readership hungry for the new more genteel take on the “yellow peril” (remember the Japanese bubble? Rising Sun?). Eamon Fingleton’s books are a better read for those who really want to know how the different Asians business communities have managed to prosper and how Asian business is likely to develop.
Fannin starts with a group she calls the “copycats”; largely Chinese graduates of US universities returned to China to start businesses. She relates that Robin Li of Baidou took the Google search engine concept to China, improved it over Google’s Mandarin incarnation and quickly dominated the market. Baidou has become a solid, successful business. Fannin thinks the Google Empire will probably Strike Back (Sorry George), but, for reasons never quite elucidated suggests that the very pleasant and personable Mr. Li will prevail. He will or he won’t and I suspect that having read the book we are as yet none the wiser.
Fannin follows with descriptions of Jack Ma and Ali Baba, a yahoo/ebay competitor, Peggy Yuyu, entrepreneur of Dangdang China’s premier online book sales company, John Zhang , creator of CCC a sort of Chinese on-version of the AAA and Joe Chen with Oak Pacific Interactive – a kind of Chinese “Facebook”. These Chinese achievers have obviously pioneered new markets with albeit established business plans. Using Chinese to serve Chinese is hardly the penetrating concept that Fannin regards it, nor is their lead for now in China over the older global English based companies surprising. However Fannin neglects more than superficial discussion of the threat of rivals old and new in such a volatile and interestingly skates over the fact that the Yahoo founder (Yang) and the purveyor of My Space in China (Wendy Deng) are both immensely successful Chinese. Fannin does glance fearfully at Deng but apparently Deng’s marriage to yangguizi Rupurt Murdoch has somehow contaminated her Chinese ethos and as jiayangguizi may have a hard time prevailing in Fannin’s vision of the Chinese motherland.)
Fannin included a chapter on venture capitalists epitomized by Sequoia who believe to paraphrase “Well regarding China, we didn’t think so but now we do” followed by Fannin, again paraphrasing: “Well everybody is on the boat to China but Chinese
venture capital financiers will pick the winners” Really? These are not the Japanese with their fantastically parochial ideas about who may sit at the head table. Although the current Chinese economic development model borrows heavily from Japan, the Chinese were engaged in complex multi-year venture finance deals trading with the Middle East when the Japanese still wore animal skins and subsisted on roots and berries. Certainly, the Chinese prefer dealing with other Chinese- pares cum paribus facilime congregantur. But unlike many in the world, the Chinese are not consistently stupid about it. This book is pre 2008 so information concerning capital availability is dated.
Fannin concludes with chapters on native educated entrepreneurs she considers the future trend. That may happen but there is no hidden nationalist agenda. Able people rise to the challenge when the system allows it. These businesses larely exploit niche opportunities connected with introduction of non-Chinese technology (mobile telephone, internet) to China. Important but hardly surprising, the fact that they are best done by people raised in China is so obvious as to defy the need for serious comment. The last case study is a scientist, Jiyang Fengyi, who developed a white light LED. Fannin’s treatment of Fengyi suggests Chinese scientists are just now coming into their own. Rubbish. Chinese scientists have been in the forefront since the end of the Empire. They have generally had to emigrate to access adequate research facilities. Fannin would do well ere she suggests Chinese in Silicon valley are a recent phenomenon to peruse the work of Chinese scientists over the decades for the U of Cal. System, US tech companies and the government. I wonder how many venerable Chinese names grace the rosters of Bell Labs. So a Chinese person is now building a high tech plant in China. Comendable to be sure. Haven’t the Taiwanese been doing this in Taiwan and now Shanghai for ages. The problem has been navigating regulations and obtaining capital, infrastructure and trained labor. The science has always been there. But on the “bright” side, only now, at the end does Fannin truly find for us a “silicon dragon” – the LED’s are silicon.