China's Tech Sector Is Underestimated, Venture Investors Say - Wall Street Journal
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LAGUNA BEACH, Calif.—Americans underestimate the Chinese tech sector at their own peril, said venture investors Kai-Fu Lee and Jim Breyer at The Wall Street Journal’s global technology conference on Wednesday.
“A lot of people in the U.S. just don’t realize how strong the Chinese entrepreneurial, engineering, product, research capabilities are,” said Mr. Lee, chairman and chief executive of the early stage venture firm Sinovation Ventures, which invests in Chinese companies.
He pointed to the market capitalization of giant Chinese internet firms Tencent Holdings Ltd.
and Alibaba Group Holding Ltd.
, which are approaching those of their American counterparts Facebook Inc.
and Amazon Inc.,
as well as advanced artificial intelligence research coming from China.
“Anyone here who thinks China is a copycat. That’s just wrong,” Mr. Lee said, arguing that the U.S. will fall behind China if it takes the country’s technology sector for granted.
Mr. Breyer, best known for his early investment in Facebook and a longtime investor in Chinese companies, said that American companies historically have been “darn too arrogant” trying to enter the Chinese market and trying to distribute products or services there that were developed for the U.S. market.
Mr. Breyer and IDG Capital, one of China’s top investors, jointly announced in July that they raised $1 billion to invest in growth-stage companies both in China and those looking to enter the country, one of the largest funds targeting the Chinese market.
Though China is mostly closed today to American tech companies, Mr. Breyer said he’s hopeful that companies “like Facebook” will be able to enter China within 10 years.
Facebook founder and chief executive Mark Zuckerberg is teaching himself Mandarin and is often photographed visiting China, part of his charm offensive meant to help the social network gain entry to the market where it is currently blocked because of censorship.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
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