In a blog posted earlier this week, The Economist re-capped the progress of China’s tech industry in catching up with Silicon Valley. E-commerce and mobile payments have already overtaken American numbers.
For example, China’s risk capital financing was 10% lower than the United States five years ago. The latest data show that it is now 80% higher.
China’s inward-facing internet infrastructure prevents the flow of internet information from abroad into the country. This is one of several factors that permitted it to create parallel companies to those found in Silicon Valley, such as Google and Facebook, whose Chinese analogs are Baidu and WeChat.
While American tech experts used to downplay Chinese firms as pirating intellectual property and simply copying the American way, more and more are returning from trips to China impressed with its progress. The industry is fueled by funding from the central government, which has vowed to make the country the world’s leader in artificial intelligence by 2030.
Chinese artificial intelligence technology has grown by about 90% compared to that of the United States, a sign that it is catching up among the complex sciences, the report observes. Furthermore, China already leads in facial recognition technology, which has become a fixture of everyday life, prevalent throughout transport, public security, financial services and retail sectors.
The number of e-commerce transactions in China outpaced the United States over five years ago. According to recent data, they’re roughly 175% of the transactions in the United States. An increasing amount of Chinese consumers prefer foreign products purchased on Chinese shopping platforms like Alibaba, JD, Tmall, and Vipshop.
China’s mobile payments totaled US$12.7 billion as of October 2017. According to the Chinese Ministry of Industry and Information Technology, that’s the largest volume in the world. The growth rate has been unprecedented as well – those ten months reported surpassed total payments for the prior year.
However, despite rapid growth, Chinese technology companies still have a long way to go. Chinese tech companies are worth about a third of US companies and bring in very little revenue from abroad. The country also continues to lag behind in business software and semiconductors, and has very few mid-sized firms to fuel competition and drive growth.
According to the Economist, China is still 10 to 15 years away from achieving technological parity with its Western counterpart.