AI, News, Software

Chinese Tech vs US Tech – China Is Gaining Ground

Chinese Tech

Chinese Tech

America has been seeing a decline in the technology department. The country keeps reassuring itself that even if the roads, airports, and schools continue to slide, nobody can challenge their supremacy in the sophisticated fields. This includes the leading, elite universities. Does the United States of America need a reality check? Things may not remain as they are until the end of time.


China already overtook the US in exports back in 2007 and manufacturing in 2011. It is now looking to take the lead in absolute GDP by 2030. However, Silicon Valley is still considered the place where the best ideas are hatched and where the greatest minds of the world come together.

That being said, and taking nothing away from Silicon Valley, perhaps they should not underestimate the Chinese tech industry. Chinese tech leaders have always loved to visit California. They invested there because they were awed by it. They still love to visit and invest but they are no longer awed by it.

If we look at the market values, Alibaba and Tencent are in the same league as Alphabet and Facebook. China’s e-commerce sales double America’s. In addition, the Chinese send 11 times more money by mobile phones than Americans, who still prefer writing checks.

Venture Capital

The (VC) venture-capital industry is booming in China and American visitors are the ones now in awe after seeing the entrepreneurial work ethic. The government decreed last year that China would be the leader in the field of AI by 2030.

Ongoing through the figures from AllianceBernstein, Bloomberg, CB Insights, Goldman Sachs and McKinsey including 3,000 listed, global tech firms and 226 unlisted firms with a worth of over $1 billion. Plus Huawei, the Chinese hardware giant, it is concluded that China is still behind with a tech industry that is 42% as powerful as America’s. But, it is catching up and catching up fast as this figure was just 15% in 2012.

Market value

Let’s see where China is lacking still and what it needs to improve on to become the leader in technology around the world. First of all, its total market value is only 32% of America’s industry. There are just two huge companies and many smaller ones but very few firms sit between the $50 to $200 billion range. On the other hand, the non-tech firms are primitive and only 26% is digitized as the American counterparts.

Chinese tech’s absolute budget is only 30% as big as that of American tech and still needs to capture the foreign market. However, the gap is closing when it comes to e-commerce and the internet. Chinese firms are only 53% as big as America’s (measured by market value). The unlisted firms in China are worth 69% of those in America. As based on the money spent in 2016, the level of venture capital activity in China is 85% of that in America.


China is also making breakthrough innovations. Take AI as an example. There are only 6% AI experts in China or you can say 16% if we include everyone of Chinese ethnicity. However, the number of cited AI papers by Chinese scientists is already at 89% of the American level.

The favor is shifting towards the Chinese tech industry. It will be at par with America’s in the next 10-15 years. This will not only increase the country’s productivity but will also create more tech jobs. Perhaps, what is more, attractive is the ability to set global standards and change the perception of countries hesitant about relying on Chinese firms.

This is a cause for worry for Silicon Valley. They need to up their game if they wish to remain the technology leaders in the world. At the rate at which things are currently going, they will be overtaken by China within 2 decades.

Author: -Ali Vaqar. A budding engineer, wanting so much from life and making each day count.
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