Really? I’d be worried about doing R&D in China, given the track record of outright stealing anything that isn’t nailed down. You’d also have to wade through a Byzantine network of graft and family connections to get anything done, deal with the central government’s whims (imagine Apple in China telling their equivalent of the FBI to sit and spin), and hope that their opaque economic structure really is heading in a good direction. China gets the manufacturing business because of plentiful, desperate labor, but that’s just for manufacturing. Much of the other business there is a matter of gaining access to the Chinese market.

If China were to have continued its gradual openness before XJ, I would have agreed. Now, I have my doubts. Sure, innovation needs capital and it also needs an educated and skilled workforce, but it also needs freedom of speech to thrive and grow. Without freedom of speech, all you have is one giant copier. There's an intellectual cost to constantly having to determine whether you can say or write something without getting in trouble. imo A South Korean metro has a much better chance of replacing SV long term.

For hardware prototyping and manufacturing, it already is.