Facebook, China and Innovation

As Facebook made its stock market debut on Friday morning, and with observers wondering if and when the company will attempt to enter the China market, The New Yorker’s Evan Osnos stepped back from the flurry of Chinese state and social media commentary and asked whether “the political system that has nurtured China’s rise may also be limiting its next step”:

Beyond the snark and the state media, a more earnest discussion has gathered force. Despite years of investment and official injunctions to advance Chinese technology, China has yet to produce a brand or original tech product with a fraction of the global influence of Facebook or Apple. Chen Yongdong, a Shanghai-based technology writer, adapted the title of a famous Chinese poem for an essay he called “Raising My Head to Look Up to Facebook; Lowering My Head to Think About Its Chinese Counterparts.” He wrote: “If you don’t have innovation, are you not going to be laughed at by the industry, and by the world?”

In all likelihood, China is approaching the end of its run as the world’s low-skilled workshop. There are fewer workers, and they are pursuing more income and skills; Vietnam and other neighbors are cheaper. The larger problem is existential: The nation that so often reminds the world that it invented printing, paper, gunpowder, and the compass is exceedingly uncomfortable about how far back it has to reach to name its world-beating inventions. China has excelled in several pockets of innovation (genomics and nanotechnology, for example) but those are the exception; Chinese technology is now best known for “process innovation”—reducing the cost of producing, say, low-end mobile phones for Huawei—and for the distinctly Chinese term, “re-innovation,” which involves making something simpler or cheaper than the original.

Even successful Chinese Internet companies, such as Tencent and Alibaba, are respected for their business achievements, not for their original insights. The obstacles are not a mystery: The government has failed to protect intellectual property or promote small- and medium-sized businesses with good ideas, to name a couple of factors.

Imagine, for a moment, the Chinese version of the Facebook story: A no-name undergrad in the Tsinghua University computer-science department gains notoriety for a high-profile prank that makes the university concerned about its digital security; instead of getting expelled, he starts a company, drops out, attracts prominent investors despite ignoring powerful players in the field, is invited to meet the President of the country, continues expanding, goes public, and makes billions. Impossible—for all kinds of reasons (a Chinese student who toys with a university network might not be enrolled by the end of the day), but the most vexing question may be, as an editorial in Nature once put it, “whether a truly vibrant scientific culture is possible without a more widespread societal commitment to free expression.”

The Wall Street Journal’s China Real Time Report, however, claims that China can still teach Facebook a thing or two:

With traffic quickly migrating from personal computers to mobile devices, all of the big Chinese Internet companies are pushing hard into mobile, but some with more success than others. Though Mark Zuckerberg is well aware of the mobile challenge, he might think about following in Tencent’s footsteps, and instead of working on a more streamlined Facebook app or some grander mobile operating system, make a new mobile product from scratch.

China’s largest internet conglomerate, Tencent, launched a new mobile chat service last year called Weixin.

On top of its mobile chat function, Weixin has integrated audio and photo sharing and other quirky features, one of which allows users to shake their phone and start up a conversation with strangers shaking their phone in the area. According to the Chinese media it’s also testing a new circles feature, that has the uncanny power to automatically categorize friends and contacts based on how a person knows them, and even throws in a few similar strangers for good measure.

As Kaifu Lee, former head of China for Google points out, what has set Weixin apart is it has left completely behind the “baggage” of being a PC product.

“Facebook’s client was not inventive from the get go for the mobile experience, [it was] just aiming for functional compatibility with desktop version. That may on the positive side it will be more friendly to the desktop client, but the downside is it’s not optimized for mobile,” he said.

See also speculation in Forbes on what impact Facebook’s IPO will have on China’s top social network, Renren.