If China is on track for global tech dominance, its only remaining obstacle may be regulation, as the country struggles to keep up with the fast pace of technological innovation.
Speaking July 10 at RISE Hong Kong 2018, an annual conference for APAC's tech and startup space, a panel of experts on China’s technology sector said regulation and the behavior of China’s government are costing the country its competitive edge.
Xunlei's Lei Chen at RISE Hong Kong 2018
"It’s not that the [Chinese] government does not care, it’s just that regulation, particularly in privacy protection, has not kept pace with innovation,” said Bessie Lee, founder of Withinlink, a China-based startup incubator and early stage venture fund focused on marketing and communication technology.
She added that the country needs to protect its users better, pointing to the European Union’s recently enforced General Data Protection Regulation, or GDPR, as an example.
China’s new cybersecurity law, which took effect in June 2017, has frequently been compared to Europe’s GDPR.
Under the Chinese piece of legislation, operators of "critical information infrastructure" — including those in the public communications and information, energy, finance, transportation and public governance sectors — must store personal data and important business information inside China, provide unspecified technical support to security agencies and pass national security reviews.
Some industry experts called the law too strict.
Xunlei Ltd.'s CEO Lei Chen said that the government has been harsh on blockchain technology in particular, due to a raft of local players that are "too focused on fast money."
When it comes to blockchain technology maturation, he believes China has a lot of catching up to do.
Late last year, China ordered all bitcoin exchanges in Beijing and Shanghai to wind down their operations after the Chinese central bank decided to ban initial coin offerings.
"When the regulatory environment becomes healthier, it will be easier to separate the good and the bad [players] and investments into tech will follow,” Lei said.
However, China's rapid rise in a number of emerging technologies is likely to make the country a global tech leader in the near future, the panelists argued.
For example, China is taking the lead in artificial intelligence and making headway in areas such as mobile hardware, Lei told delegates.
In fact, a July 9 RISE Hong Kong survey of 100 global investors, with funds of up to US$50 billion, found that 67% think China will become the world's leading power in tech within the next five years.
One explanation for the rapidly evolving tech scene, according to Harry Hui, founding partner of private equity and venture capital fund ClearVue Partners, is that China’s landscape has changed so drastically, with domestic technology players locked in a "fierce competition," that this resulted in technology evolving at a faster pace than global counterparts.
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