By Andrea Chang
Los Angeles Times.
Alibaba was just the beginning: Get ready to hear a lot more about Chinese tech companies.
China’s technology industry, much like China in general, is undergoing a transformation. Entrepreneurs speak of an innovation “golden age” fueled by a mobile-device-obsessed culture, upward economic mobility and an influx of capital from investors locally and abroad.
“China is going through an extraordinarily innovative period,” said Eric X. Li, a venture capitalist and political scientist in Shanghai. “My bet is that five years from now, the most valuable company in the world will be a Chinese technology company. My second bet is that five years from now, the second-most-valuable company in the world will be a Chinese technology company.”
The stunning success of Chinese e-commerce behemoth Alibaba, which went public on Wall Street in September, has been instrumental in paving the way: Founder Jack Ma, a former schoolteacher, is now China’s richest man, and Alibaba has become a $263-billion juggernaut with far-flung interests in areas such as entertainment, mapping and banking.
“It proved one thing, which is you can grow a company pretty much from ground zero to a very high level. It gave young graduates a good example,” said Lingyun Gu, an investment advisor at Beijing-based IDG Capital Partners.
China for years has been laying the groundwork to become an innovative tech power player, not just an electronics manufacturing machine. The government subsidizes and promotes numerous high-tech clusters around the country, and university-affiliated and independent incubators have stepped in to nurture young entrepreneurial talent.
Those efforts are beginning to pay off.
In the second quarter, investments in China’s fast-growing telecommunications, media and technology companies totaled $5.35 billion across 214 deals, the cash coming from inside and outside China. That was seven times more than the $752 million the industry received in the year-earlier quarter, according to a recent MoneyTree report from PricewaterhouseCoopers.