[micaksica]

> The people who will get ahead in China in the future are the ones who are somehow able to live outside of China to experience new ideas.

So in other words, the ruling class continues to rule, as they will be the only ones with the sanctioned political freedoms to study abroad, etc.

> China's fate as being relegated to being the world's giant copy machine is sealed unless things revert

China being the world's giant copy machine has worked very well for those in power in China. Why not sustain that as long as possible? What other country has the stability and resources to replicate that? Most countries with extremely cheap labor don't have the supply chain.

[bad_user]

China might build their own products and I can see them building WhatsApp alternatives, but I won't install Chinese alternatives to WhatsApp on my phone, which means the Chinese won't be able to talk with me, an European, all the while I'm communicating without issues with acquaintances from all over Europe and the U.S.

This means that the Chinese are living in a bubble. This isn't news of course.

But the other issue is that they can't attract much foreign talent to relocate there, like Europe and the U.S. have historically done. Because they don't have a culture friendly to immigrants, but also because their environment is toxic for those of us that are accustomed to liberal democracies.

And their "copy machines" are actually racing against the clock, as more and more factories get fully automated and thus relocated home, not to mention their rising middle class, thus their cheap labor advantage will eventually go away. So when multinational companies will no longer assemble their products in China, what will they copy?

Of course, their middle class are now sending their children to western schools and many of them will probably go back to China, but on the other hand the best and brightest end up having the choice to stay in the west and many of them will.

[tesseract]

> And their "copy machines" are actually racing against the clock, as more and more factories get fully automated and thus relocated home, not to mention their rising middle class, thus their cheap labor advantage will eventually go away. So when multinational companies will no longer assemble their products in China, what will they copy?

There's more to this than just being a provider of manufacturing services for overseas consumer goods companies wishing to outsource production. China has pursued a policy of forcing Western heavy-industry companies (infrastructure, aerospace, etc.) wishing to do business in China to form joint ventures with domestic Chinese companies which then serve as a means of transferring expertise to the Chinese companies. The Western companies go along with this because it's preferable to being shut out of the Chinese market altogether.

For example, Chinese high speed trains were initially based on imported designs (both the Shinkansen and European trains) built by joint ventures between the original makers and Chinese companies. But today China is domestically producing high speed trains using technology copied from those original ones.

[seppin]

So you believe China can fully exist as a bubble, selling to China, recruiting only Chinese?

[whooshee]

Your views on things are pretty static, China has ups and downs in the river of history, it also had tech flourishing time like in Song dynasty. I guess 40 years ago you would never have a chance to see what China could be now. By the way, Shinhansen also imported a great deal tech from Germany, but what's big deal of it? Why can't China just learn from other countries and build a better and more accessible one? Just like Japan or America did? China now has fully advanced high-speed trains and pushing it to dozens of markets. Including The U.S. You were talking about the policies, those big companies came and made their money without paying taxes, not to mention successfully transferred a lot of polluted industries to China. they got what they deserve. Don't whine about that.

[threatofrain]

I don't think it'll be a contradiction for China to create a special city with more liberal values to attract liberal talent, or if China permits liberalism in a controlled context. Tech talent such as Andrew Ng already go to work in China knowing the political context surrounding China. I'm sure some HN people go to work in Dubai, which I'm sure has some contradictions to western cultural values.

I'm also not sure if the perceived ingredients for collective creativity are all that obvious or as critical as you seem to say. Perhaps competition is the most important ingredient, as opposed to freedom of political speech. And perhaps a well-educated aristocracy can nurture technological competition without also being afraid of it.

[asteli]

I would argue that this has been happening for a long time.

Example - China's Special Economic Zone program. Districts which have lowered administrative and regulatory barriers, specifically designed to attract foreign capital. Shenzen's SEZ has existed since the 1980's.

And that's not to speak of the numerous foreign enclaves that have existed throughout the years, from Hong Kong , the International Settlement and later the French Concession in Shanghai, and the numerous foreign districts that have popped up more spontanously (e.g. Jing'an, Shanghai)

[pavlov]

> I don't think it'll be a contradiction for China to create a special city with more liberal values to attract liberal talent, or if China permits liberalism in a controlled context.

Hong Kong has been the test laboratory for what the Communist Party calls “One country, two systems”. It doesn’t seem like the regime is very happy with the experiment, or would be looking to expand it.

[thorin]

Really, I think they are expanding in that area, just not pushing for deregulation just yet: https://www.theguardian.com/cities/2016/may/10/china-pearl-r...

[micaksica]

> their middle class are now sending their children to western schools and many of them will probably go back to China

I disagree with the "middle class" being the ones sending their children internationally. The Gini coefficient in China is higher than that of the United States. Even if it was the same income distribution, America's middle class cannot afford to send their children to private schooling in other countries.

These people are not the middle class -- they are quite far away in income away from the median of the income distribution, even in urban areas. They are the upper class. Maybe the lower upper class, but it's a stretch to say they are middle class.

[umanwizard]

"Middle class", "upper class", etc. are not defined by percentiles. Otherwise it would mean nothing when we say a particular country has a "growing middle class".

[FabHK]

At any rate, GP is right that it's not the "growing middle class" in China that sends kids to private school in the US. It's the upper class.

Make it about half a million Chinese students in the US currently, so we're talking about the top 1%.

[ralusek]

If they were defined by percentiles (i.e. certain definitions of middle class dictate the middle 60% of the population by income), you could still describe a "growing middle class" as a middle class acquiring a greater percentage of total income. While the population of the middle class isn't growing, its buying power still could be.

[umanwizard]

Well sure, but that's not what anyone means by those words.

[dreamfactored]

Easy way to measure the middle class with your own eyes - count the number of Uniqlo stores (or Starbucks type places) and watch how fast the products are moving in them. In major Chinese cities that has rapidly accelerated over the last few years and they are now on a par with (or even ahead of) any major Western city.

[turvytopsy]

>> But the other issue is that they can't attract much foreign talent to relocate there, like Europe and the U.S. have historically done. Because they don't have a culture friendly to immigrants, but also because their environment is toxic for those of us that are accustomed to liberal democracies.

This is becoming more and more untrue by the day.

While Europe and US did historically attract foreign talent, the good times were bound to come to an end once the immigrants started conspicuously thriving at the same time automation killed a lot of once well paying jobs for the locals. Ergo, Trump and the Trump-wannabes across Europe.

The notion of a "culture which is friendly to immigrants" is on a fairly quick downward trend and I would like to place bets with anyone here on this: the number of people immigrating into Europe and US will be drastically lower in about 5 years time.

The environment in liberal democracies are no less toxic today. A good example is a famous cartoonist whose once-intelligent writing on his website has turned into nutjob click-bait after he started fantasizing about his king-maker abilities. Either he holds opinions which are far from the majority, in which case you need to explain Trump's election. Or it coincides with the majority, in which case calling the outsiders' philosophy toxic is an example of someone in a glass house throwing stones at others.

[seppin]

> This is becoming more and more untrue by the day.

I see no evidence of this. Your evidence is "Chinese isn't so bad" and "what about Trump and anti-refugee trends in Europe?"

Those are social trends, which still exist at the margins of society (more so with Trump, but he still remains a minority figure).

Business, culture, freedom, lack of corruption. Until China matches the west in these points, they will never be a true destination for the world's best and brightest.

[mattmurdog]

They already have an alternative it's called WeChat. Maybe other people should install that instead?

[FabHK]

It's way more powerful than WhatsApp, too (location based chats, payments, etc.). And, of course, it's not E2E encrypted; just the opposite, you can assume that it's being wiretapped/monitored.

Thus, please don't install it.

[086421357909764]

WeChat acknowledged the monitoring :(

http://www.moneycontrol.com/news/business/companies/wechat-c...

[pishpash]

Every service should make such an acknowledgement.

[micaksica]

> you can assume that it's being wiretapped/monitored.

This can be assumed with any technology stack that is popular, domestically-grown, and well-established in China.

I have WeChat installed. Would I use it to converse with people outside of China? No. But casually, it's what's accepted there, what people ask you for, and what everyone's using.

[FabHK]

Sure, I might use it myself if I'd return to China, but I'd hate for it to become the default chat app outside China - that's what I meant with "please don't install it"...

> This can be assumed with any technology stack that is popular, domestically-grown, and well-established in China.

Agreed.

[taobility]

I just wondering, for normal people, what kind of information you concerned to not be monitored, seriously? I knew most western take the privacy higher than anything. But for most normal people living outside of US, they really don't care. You would say they are dumb, but they care more about food, entertainment than the privacy, and liberal. To be honesty, nobody in China cared WhatsApp be blocked or not. As maybe 99.9999% Chinese even don't know there is an App called WhatsApp.

[musage]

> I just wondering, for normal people, what kind of information you concerned to not be monitored, seriously?

What are normal people in your books? People who don't care what happens to non-violent political dissidents because they themselves are well aligned with their owners? That's not normal, you have to break a human child to get those results.

A child raised by illiterates and being only among them might never care about reading nor writing. So? Does that raise the value of illiteracy in my eyes? Not at all, not one bit. They're still missing out in ways I can't even explain to them.

> A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.

-- Robert A. Heinlein

Not to speak for Heinlein's fictional character, but I'd add to the list things like "decide what is right and wrong, what is good and bad". Some people think the group they belong to give them value, I think individual human beings make up groups and give them value. If most people don't care about things I find important for reasons I can articulate, that's just more people to have a discussion with. But just the fact that they are many is about as important as if someone saying something is skinny or obese. I don't multiply the value of an opinion by someone's body weight or how much money they have, and likewise I don't multiply it by how many people have an opinion.

[int_19h]

> I just wondering, for normal people, what kind of information you concerned to not be monitored, seriously?

Political dissent, for example?

[pishpash]

Then why block it?

[taobility]

Because it's not under control, which against Chinese government's philosophy.

[AmIFirstToThink]

>And, of course, it's not E2E encrypted; just the opposite, you can assume that it's being wiretapped/monitored.

Whatsapp is not? Are you sure? I would assume NSA doing all it wants as well.

Whatsapp is out not because it can't let authorities audit it, but because of other economic reasons.

[FabHK]

> Whatsapp is not? Are you sure?

Well, it's E2E encrypted, that's for sure. The NSA, like the Mossad, can do pretty much anything if you're a high-value target, I'd assume, but personally, I don't think there is blanket mass surveillance of WhatsApp chats, no.

> Whatsapp is out not because it can't let authorities audit it, but because of other economic reasons.

Do you have any evidence or even arguments for that assertion?

[AmIFirstToThink]

WeChat employs people in China.

[pertymcpert]

Yes it is.

[varjag]

So far they had little success convincing the rest of the world using the tech that only a Communist mother would love.

[whooshee]

Because other services already rooted in other areas. Japan got Line, South Korea got Kabaotalk.

[FabHK]

> I can see them building WhatsApp alternatives

And maybe later they might even build alternatives to Google, Twitter, and eBay!

/sarcasm - please check out WeChat, Baidu, Sina Weibo, Alibaba

[tanilama]

There is WeChat, and it is far more successful than WhatsApp.

[bad_user]

With WhatsApp having over 1 Billion daily active users [1], I find that really hard to believe, but assuming that all of China's population is on WeChat ...

My point is that WeChat does not exist for me and probably never will.

[1] https://blog.whatsapp.com/10000631/Connecting-One-Billion-Us...

[yeukhon]

The last bothers me. It sounds like you invalidate his/her comment because you don't use it. WeChat is definitely more Chinese-speaking population dominant, but not necessarily just users in China. This is a massive network.

[bad_user]

No, I'm using me as an example, the point being that the Chinese market is a bubble at least when speaking of Internet services.

What this means, for one, is that there is no cooperation or interoperability and these policies of the Chinese government are to blame.

From the sources available online WeChat's userbase is 90% Chinese. [1] So it might be a massive userbase, but it's not diverse.

Ask yourself this: would WeChat be successful if it weren't for the Chinese government favoring it, even going so far as to ban alternatives or worse?

Maybe, but maybe not, we'll never know, but products like WeChat are definitely not the result of free market competition in an international context.

If you know my phone number, you can contact me on WhatsApp. But you can't contact me on WeChat, because I'm not using WeChat, because I'm not living in China to be forced to use it and so the opportunity for a Chinese to contact me isn't there and I'm not going to install WeChat just because I might get contacted by a Chinese (there's always email).

Of course, in the future I myself would likely be interested in doing business in China, so I might end up wanting to talk with WeChat users.

But seeing such developments by the Chinese government is to me a strong signal that China is not a good place to do business. It might be for huge companies like Apple which have infinite resources, but as a small guy I couldn't bring myself at the moment to phantom developing a product, or delivering services to the Chinese market given that it's definitely not a free market.

So no matter how you look at it, the Chinese government has been maintaining an information bubble, keeping such products as WeChat tied to the Chinese market.

[1] http://www.businessinsider.com/wechat-breaks-700-million-mon...

[ebola1717]

If DAU is your only metric, sure. WeChat has a horizontal breadth that Facebook Messenger and WhatsApp have been trying to copy though. The equivalent of ApplePay, Venmo, basic online shopping, etc are all in WeChat.

https://a16z.com/2015/08/06/wechat-china-mobile-first/

[pangfandang]

China is still very poor. The Chinese rural households have a per capita income of only 9,892 yuan – about $4 dollars a day. and there's 680 million of these rural households still.

Chinese urban households have only a per capita income of 29,831 yuan – an abysmal $4,500 a year.

https://geopoliticalfutures.com/china-is-still-really-poor/

And we see the effects of poverty on education: "Surveys by Rozelle's team have found that more than half of eighth graders in poor rural areas in China have IQs below 90, leaving them struggling to keep up with the fast-paced official curriculum"

http://www.sciencemag.org/news/2017/09/one-three-chinese-chi...

[notyourday]

> And we see the effects of poverty on education: "Surveys by Rozelle's team have found that more than half of eighth graders in poor rural areas in China have IQs below 90, leaving them struggling to keep up with the fast-paced official curriculum"

Just remember that we do not measure in the US IQ these days because the results would be very painful to look at for the poor of the US.

[yeukhon]

I am not worried about the poverty, I am more worried about the whole estate boom and it is on the edge of collapsing. Actually, there are ghost cities in China...those who got rich because they sold lands. They weren't rich because of their skills. This is a big problem to create a more balanced social classes based on income. A healthy economy cannot rely on just one or two specializationa (this is so evidence in Hong Kong, where nearly the captials were built on banking, investment and real estate; there is very little room for anything else to emerge). China has the same problem: major cities is populated with the professionals. In America at least every state has something to offer...

[kwoff]

The things you mention are easily turned around (I certainly don't support the CCP, however).

Maybe the Chinese are very efficient with their money (try living on $4 a day in the US; or what does $4 mean in China?), or don't need as much money due to... a socialist system and/or, if you prefer, Hong Kong Post. Maybe they've started to realize the dream of Star Trek's "economy". ;)

"Consider the aggregate IQs of rural and urban/suburban whites [in the US]. During the 1970s according to Wordsum-IQ data, the intelligence gap between whites raised on farms and those who grew up in an urban/suburban background was enormous, almost exactly equal to the white/black gap. The data would indicate that a non-trivial slice of the white farmboys of the 1970s suffered from clinical mental retardation".

[AmIFirstToThink]

Whatapp employed 55 employees when it was sold for 19 billion.

Banning whatsapp to get local competitor which employs local talent, is actually better for China from poverty point of view, isn't it?

[whooshee]

Because they are poor, they do not have the right access to the resources both nutrition and education. Eliminating poverty is at the top priority of the gov't plans. It's said to totally finish the plan in 2020.

[princekolt]

> China being the world's giant copy machine has worked very well for those in power in China.

Yes, but that's not OPs point, I think. What I think OP means is that the west doesn't have to worry (much) about China becoming the world's main innovation spot, because with censorship, the best they can do is copy. In a weird way, this is good for the western world.

[FabHK]

I think that's too optimistic. It seems to me that China manages to control the vast majority of the population. If you have technical expertise and perseverance, you can still circumvent the GFW (great firewall), install WhatsApp, etc., and I think you will continue to be able to - but most people in China don't.

(It's a bit like pirating music and movies in the west - you can still do it, but many people now use the legal options (iTunes, Netflix, ...), because it's just not worth the hassle.)

But the CCP doesn't care about a small elite knowing things.

OP contends that suppressing political discontent and censoring & controlling the communication of the vast majority of people will necessarily impede innovation and economic growth. That's not obvious to me at all, unfortunately.

[AmIFirstToThink]

The best they do is manufacture.

The kids growing now in West have lost ability to tinker.

If you are into electronics and manufacturing, China is like playground to experiment. In the west, we are losing rights to fix the gadgets we own.

[whooshee]

Come on, check out Nature Index and see CAS. Or you can see the FAST telescope project located in China. Why you are so pride about the west. Every civilization has their ups and downs. In Song dynasty, what the West was doing?

[chaostheory]

> China being the world's giant copy machine has worked very well for those in power in China. Why not sustain that as long as possible?

Someone may correct me...

1. having a more open society results in more innovation, which results in more economic development which allows the ruling class to become even wealthier and more powerful globally

2. currently, only 18-20% of China is middle class. About 78% of China is still poor. If things slow down due to a lack of innovation, historically things get ugly.

[KGIII]

This article has some very different numbers. Also, it may be a small percentage but the total number of individuals is huge. There's a lot of Chinese people, after all.

Anyhow, link:

https://chinapower.csis.org/china-middle-class/

As for the numbers in that link, I'm not sure of the validity. I see lots of different numbers quoted at different sites. I have to wonder if it is accurate. A couple even put their upper middle class at 35%.

[chaostheory]

According to your article (unless I misread it) the lower class is 68% of the population. While it has greatly improved, there's still a huge gap

[KGIII]

Right, 32% vs. 18-20%. Which, in hard numbers, is quite a few individuals. Your post said 18-20%, so I figured I'd give you the current estimates for more accuracy. The estimates for upper-class were but 2%.

Probably important: There is some disparity in numbers. A few claimed higher, a couple had lower. Neither was significantly higher or lower, so I went with that one. Interestingly, a frequently listed number was 50% middle class by 2030.

My guess is that the numbers aren't accurately reported, which explains the variations.

[marcosdumay]

> having a more open society results in more innovation

Yep.

> which results in more economic development

Yep.

> which allows the ruling class to become even wealthier and more powerful globally

This one does not follow. It's probably false. Even if China gains a ruling class that is wealthier than the current one (what isn't a given), there is no reason to think the same people will be there.

[bitcuration]

What he meant is it has worked well for a selected few in China, as well as those international tycoon.

[chaostheory]

Yes I understood. I'm just saying that it can be even better for those select few as well. i.e. they are leaving money on the table