Trump govt’s crackdown on Chinese companies likely to backfire: experts

By Xie Jun and Chi Jingyi Source: Global Times Published: 2020/8/4 20:28:40

Silicon Valley losing its edge to attract talents



People visit the Ant Financial stand at an digital economy exhibition in Fuzhou, East China's Fujian Province on April 25. Photo: VCG



Best unicorn companies 2020 Graphics: GT


The Trump government's crackdown on Chinese companies and its hostile attitude toward China are likely to backfire, as Washington's coercion is disrupting globally-recognized rules of business and commerce, experts said. 

According to the Hurun Global Unicorn Index 2020, a list released by Hurun Research Institute which ranked global startups founded after 2000, there were 16 unicorns founded by first- or second-generation Chinese by the end of March, and most are located in the US, particularly the US technology hub Silicon Valley. 

Unicorns refer to private companies whose valuations exceed $1 billion.

Based on statistics in the list, a large portion of ethnic Chinese-founded unicorns in San Francisco are high-tech firms, such as the artificial intelligence (AI) company Nuro and Software-as-a-Service (SaaS) firm Airtable. 

 
Global unicorn company headquarters Graphics: GT

 
Besides founding businesses, Chinese talents also form an important force in Silicon Valley by working for local companies. Zhang Xiaorong, Director of the Cutting-Edge Technology Research Institute, said that many cutting-edge technologies in Silicon Valley are being developed by Chinese. 

Meanwhile, what China has brought to the US tech hub is not only talents and innovative business ideas, but also capital. For example, ZhenFund, founded by one of China's most celebrated angel investors Xu Xiaoping, has invested in Silicon Valley-based firms including big data firm TasteAnalytics. 

An article by tech news portal OneZero also noted that the flow of people and money between Silicon Valley and China was "constantly rising" in recent years, with many Chinese people flowing to work in the Valley. 

There are also ethnic Chinese-founded unicorns scattered in US cities other than San Francisco, such as 3D Printing firm Desktop Metal, which is located in Burlington, Massachusetts. 

However, the technological power of Silicon Valley, which often is considered a representation of US innovative abilities, might be harmed because of the Trump administration's discriminative policies against Chinese companies and the US government's hostile attitude toward China. 

According to Zhang, the Trump administration's immigration policies will have a significant impact on many Chinese technicians who have not obtained a US green card.

"If there is a mass exodus of Chinese employees, Silicon Valley companies will not be able to fill the talent gap in the short term," Zhang told the Global Times.

Xiao He, an associate research fellow at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said that there is no evident back-flow of Chinese talents who are working in the US. 

However, as many Chinese people working in the US graduated from US universities, it is possible that the US government's tightening of student visas would cause the number of Chinese students in the US to drop in the future, which will in turn affect Silicon Valley's talent pipeline, Xiao said. 

While Silicon Valley's attraction to talents and innovative companies is under a political shadow, the number of unicorns is surging in China.

The Hurun list showed that there are 233 unicorns in the US and 227 in China, making them two countries in the world with the most unicorns. 

In particular, among the world's 10 highest-valued unicorns, six are Chinese companies. Alibaba's financial arm Ant Group is the world's largest unicorn with a potential valuation of $150 billion. ByteDance, owner of TikTok, is the second-highest with a valuation of $80 billion. 

But experts also noted that Chinese cities and the Silicon Valley will attract global unicorns in a different way in the future. 

"Chinese cities like Shenzhen, Beijing and Shanghai will provide incredible soil for internet application firms and the relatively flexible government management policies, while Silicon Valley has advantages in researching core technologies," Xiao said. 

Zhang said that technology and patents are central to Chinese companies' ability to withstand US government repression, citing Huawei's self-sufficiency to set up an entire technology chain which will help it survive under the US crackdown.

Newspaper headline: US coercion to backfire


Posted in: INDUSTRIES,COMPANIES

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