And they remix the ideas of western tech and often improve upon it. WeChat is orders of magnitude more convenient than what the US has to offer. Everything is centralized and integrated, what Google tries to do, but adopted everywhere. Book anything, pay for anything, tap phone to pay for anything. I don't expect many places to take phone payments. In China, most everywhere can take phone payments.
Their social networks also seem to do great at getting things naturally viral. I posted a random video without any boosting and it got like 1.5K views in a day.
Fascism has it's good points!
Seriously though, WePay isn't innovation - we could have that right now in the West. Citibank could make an app that would allow peer-to-peer money transfers with QR codes the way WePay works. It would be smooth and easy. You'd just have to have a Citibank account. After a while, everyone could get an account with Citibank and it would be great! The other banks wouldn't like it, but whatevs.
Then Citibank would realize they were the gatekeepers of the digital peer-to-peer economy and they would seek rent. Transaction fees would increase. Monthly account fees would sky-rocket. Eventually, the govt would realize this was a drain on commerce and would seek to regulate and maybe even break up Citibank, but in a rule-OF-law nation, the govt would actually have to go to court and Citibank would get to argue their case against govt intervention. It could take YEARS! Look at how long it took the govt to prosecute IBM back in the day!
Meanwhile, if Tencent gets too greedy with WePay, the govt just makes their CEO disappear. In fact, in a fascist state, having monopolies is an ADVANTAGE! It's one throat to throttle - if there's a problem, there's just one CEO you need to kill.
WePay isn't innovative - it's just something that works particularly well in a fascist state. Getting the whole banking industry to agree to communicate and cooperate on a common mobile payment system is a bit more difficult...
Update - s/rule-by-law/rule-OF-law/
The "feature" of WeChat is that it can be used for almost anything. It is a cash successor more so that a card alternative. Anyone can print, display or scan a QR code. Doesn't matter if it is a store, a friend or a random person. Doesn't matter if it is in the physical world, on a website or in a chat. And it is easy to do. And almost everyone uses it.
Contactless cards only matches WeChat in the same way something like Apple Pay does.
The more secure analogy comparable in price would be solutions like Square and PayPal Here. Smartphones are ubiquitous.
As the other reply says too, any shop can set this up easily. I challenge you to take contactless payments in your home country, it's nothing like simply getting a qr payment and involves merchant banking.
I've seen tiny remote rural village stores that would never even imagine having a visa PoS terminal with big wechat payment signs out front.
Since y combinator new is most frequented by people from the US and other western nations that are having this conflict with China right now, my belief is that their emotions guide their logic. So everything that China does is bad and western countries are the victims. Which is the narrative that is also being strongly pushed in the American media and to a smaller extent other western media.
But as a Singaporean living in Asia, I don't see anything wrong with China's development path. It is developing the same way as almost every other industrialised nation in the world did. First by blatant disregard for IP and then slowly as it progresses up the economic ladder, it provides more and more protection for IP. China today and China ten years ago is vastly different in terms of the amount of the strength of its IP protection enforcement. And with its current trajectory, it will be vastly stronger in ten years still. With regards to barriers to imports, China has less barriers than most of the other developing nations and reducing sharply each year.
Instead of recognising this fact and working to hasten IP protections, America seems to me to be going on a mutually destructive path that is bad for everyone in the region if not the world. That makes me suspect this is not really about IP and prosperity but power which unlike the former, is zero-sum.
Its one thing for the average person on the street, but I don't understand why intelligent people in the West find it so difficult to separate facts from fiction and emotions from logic.
Lastly, I would like to add. There is nothing inherently moral or immoral about IP. It's just a way for the incumbents to protect their position. Making this a moral problem (Chinese bad because they steal IP) is not the right approach.
Of course this is just one aspect of development and there is no silver bullet. Those who succeeded used protectionism and controlled opening of their economy as part of a broader strategy, governance, and culture.
I first encountered this when economists kept attacking rent control saying it destroyed cities, while Montreal remained the best place to live in all of North America.
Then I found this interesting essay about economists finally getting to try out an experiment about sweatshops in Africa, and concluding "Everything We Knew About Sweatshops Was Wrong":
> https://www.nytimes.com/2017/04/27/opinion/do-sweatshops-lif... > > In the 1990s, Americans learned more about the appalling conditions at the factories where our sneakers and T-shirts were made, and opposition to sweatshops surged. But some economists pushed back. For them, the wages and conditions in sweatshops might be appalling, but they are an improvement on people’s less visible rural poverty. > >As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.” > >Textbook economics offers two reasons factory jobs can be “an escalator out of poverty.” First, a booming industrial sector should raise wages over time. Second, boom or not, factory jobs might be better than the alternatives: Unlike agriculture or informal market selling, these factories pay a steady wage, and if workers gained skills valued by the market, they might earn higher wages. Factories may also have incentives to pay more than agricultural or informal market work to persuade workers to stay and be productive. > >Expecting to prove the experts right, we went to Ethiopia and — working with the Innovations for Poverty Action and the Ethiopian Development Research Institute — performed the first randomized trial of industrial employment on workers. Little did we anticipate that everything we believed would turn out to be wrong.
Never blindly trust an "economics textbook" lol. When you disagree with them, economists say "read a textbook", and when you point out the models are bad, they pivot to "it's just a textbook, real models are much more complex than that" (they tend not to be).
Macroeconomics is not a healthy field making rapid progress. David D. Friedman’s verdict on it is that we know very little is true but we know plenty that isn’t. If you want to see someone really ripping into macro read Paul Romer’s The Trouble With Macroeconomics[1]. All that said I know what happens when you contract the money supply; you get a recession. Print lots of money; you’ll get inflation. Decrease inflation; your currency will appreciate. There’s plenty more like that. Purchasing power parity works as a theory of exchange rate formation over the long run and nothing does over the short run. Macroeconomists know plenty.
Regarding theory and replication, on rent control I see Montreal and raise you Mumbai[2]. If the rent controlled price is near the market price the damage will be pretty mild. If you haven’t allowed rents to rise since the 1960’s things will be worse. On replication, more than three quarters of cancer biology papers don’t replicate so the fact that some economics papers get retracted doesn’t disturb me too greatly[3]. If you’re doing science sometimes you find out you were wrong or that you made a mistake.
[1]https://paulromer.net/the-trouble-with-macro/
[2]https://www.youtube.com/watch?v=2fh4tPWYeks
https://www.livemint.com/Opinion/2sEX5MD7aW1whVkxFllNCL/Rent...
https://marginalrevolution.com/marginalrevolution/2017/04/tw...
[3]https://www.theatlantic.com/science/archive/2017/01/what-pro...
> In 2011, Bayer Healthcare said that its in-house scientists could only validate 25 percent of basic studies in cancer and other conditions. (Drug companies routinely do such checks so they can use the information in those studies as a starting point for developing new drugs.) A year later, Glenn Begley and Lee Ellis from Amgen said that the firm could only confirm the findings in 6 out of 53 landmark cancer papers—just 11 percent. Perhaps, they wrote, that might explain why “our ability to translate cancer research to clinical success has been remarkably low.”
You invoked "economics textbooks" like some kind of conversation-ender, and I showcased several things economists treat as hard natural law that end up being, at best, oddly amiss in key cases:
- Rent control (Montreal has it, best city in North America)
- Free trade (China doesn't do it, most reduction of poverty world-wide)
- Sweatshops are desired (Except in a controlled experiment where they are not imposed, they are rejected)
- Debt is bad (Incredibly damaging pro-austerity garbage study boosted in spite its flaws)
Feel free to make each subsequent case on its own merits and evidence as you understand it, but please don't point at economists and act like they possess an authority that they do not.
And preponderance of studies doesn't eclipse a key result. Montreal routinely ranks as the best city on the continent, so even if something "works in most places", it doesn't mean it's something you should pursue when you're trying to be the best, or when you're trying to do well by yourself and not trying to be the best. You surely know about the economics "Theory of the Second Best"?
For example, India doesn't have Alibaba or Tencent or whatever because they allowed in foreign companies with stronger currencies too soon.
USA set the rules after WW2. China played the game according to those rules. Countries that didn't were either smashed economically or by warfare.
If you open your economy when you are relatively undeveloped and weak then foreign companies will immediately occupy your economy and you can forget about creating national 'champions'.
China is not a closed market but they are careful not to fall into that trap.