The West shouldn’t misread Beijing’s laws: ex-Google China supervisor
Kai-Fu Lee, CEO of Sinovation Ventures.
Lino Mirgeler | Picture Alliance | Getty Images
The former president of Google China warned the West should be careful not to exaggerate or misinterpret the regulations recently introduced by Beijing that harm Alibaba, Tencent and Didi.
Kai-Fu Lee, who now invests in Chinese startups through his venture capital firm Sinovation Ventures, told CNBC on Tuesday that China only regulates a handful of large internet companies to ensure their significant market position does not harm consumers.
“It’s not much different from what the US and the EU did,” said Lee, who currently lives in Beijing.
“The intention to limit the reach of large internet companies should not be over-interpreted …” That would be a misinterpretation. “
The Chinese government is actually “very big,” said Lee, referring to its advance in areas such as artificial intelligence, semiconductors and cloud computing.
The Taiwan-born American computer scientist expects 10 to 15 Chinese AI companies to go public in the next year, and argues that it makes sense for investors to get hold of companies that operate in industries supported by the Chinese government.
“If you believe the government [the] If a company makes it or breaks it, the government is doing whatever it takes to make these AI, semiconductor and cloud companies. So how can it be wrong to invest in them? ”He said.
Alibaba, Tencent and Didi have all seen their share prices fall in recent weeks after China introduced new rules on data sharing. Lee said there was likely a “bargain hunt” case as the penalties have now been imposed.
When it comes to regulating tech companies, Lee said China is much more “action-oriented” than the US
“The US deals with major Internet companies by going through Congressional hearings, appeals, and the Department of Antitrust and Justice,” he said.
“It takes a long time and usually no action. China is much more action-oriented,” he said, adding that Americans are not used to the speed.
“Quick decisions, if made right, will force these companies to reform and give the smaller companies we invest in a chance to create healthier ecosystems,” said Lee.
Ignore China “at your own risk”
Earlier this week, advertising guru Martin Sorrell warned that it would be unwise for companies to completely ignore China despite the challenges the country faces.
“It’s the second largest economy in the world,” Sorrell told CNBC’s Squawk Box Europe on Monday. “It will be the largest economy in the world in a few years, not per capita but in absolute terms, and you ignore it at your own risk.”
Billionaire George Soros last week criticized the world’s largest wealth manager Blackrock for investing in China. In the Wall Street Journal, Soros described BlackRock’s initiative in China as a “tragic mistake” that would “harm the national security interests of the US and other democracies.”
In response, a BlackRock spokesman said, “The United States and China have a large and complex economic relationship.”
They added, “Total trade in goods and services between the two countries in 2020 exceeded $ 600 billion. Through our investment activities, US-based asset managers and other financial institutions contribute to the economic networking of the two largest economies in the world. “