I think they absolutely are taking that path with their recent push towards the eYuan. If they want to replace Alipay with their nationalized, centralized system, I imagine the steps would look roughly like:
1. Create eYuan (Done)
2. Disrupt other solutions (We are here)
3. Disallow other solutions
4. Done
Are you trying to say that publicly-funded research cannot lead to any technological advancement?
In other words, society needs more than just basic research and bureaucratic administration of basic government services.
An engineer at SpaceX or Blue Origin is incentivized differently from one at JPL. SpaceX isn't designing rovers for a Titan mission or exploring novel theoretical propulsion systems. And NASA wasn't able to turn its decades of work on propulsive landing into a competitor to the Space Shuttle, Atlas or the SLS.
Note, too, that engineers at NASA are at the whim of Congress. I know several whose life work was cut in a budget negotiation thousands of miles away. I know several more who left aerospace for better pay in other industries.
Fair point, it does require the state to be willing to sufficiently and consistently invest in the effort for it to succeed.
That is not to say that then companies don't need to form around it, but not as black and white.
If there is a credible threat of nationalization (e.g. the government has nationalized similar organizations lately or even asserted that they are considering such things), then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them. Safe and predictable legal environment - an expectation that your business won't be taken away from you - is a strong influence on the amount of investment and entrepreneurship a country gets; and more investment and entrepreneurship generally does result in more wealth for all of society even accounting for the share of the created wealth that's taken by the owners/investors.
Dan Wong, one the more competent China tech watchers surveying local entrepreneurs on current crackdown: "They would love to have the problems of Jack Ma" because it means they've made it really big.
China isn't a dinky market, the incentives are massive, founders will settle being 100s millionaires instead of billionaires if that's the size that keeps regulator scrutiny at bay. Also the fact that PRC is willing to break incumbents via regulatory crack down is creating opportunities not seen in markets effectively captured by huge players.
> rather do that elsewhere
Instead of "elsewhere", it's really about "do something else". PRC doesn't consider draining the best and brightest into a massive service blackhole like adtech or fintech worthwhile. It's crushing incentivization structure of soft tech to make hard tech more appealing. Beijing wants semiconductors and turbojets that can eventually be exported world wide, not a more profitable ANT pyramid scheme that will likely be a drain on domestic market.
If the business being nationalized is one that is a drain on the economy in some sense, then why wouldn't it be good for the country to nationalize it? I say "nationalize" broadly here, not necessarily in the way China implemented things. It could even be the creation quasi-public organization like Amtrak.
Obviously the key here is not to be as heavy-handed as China and to not nationalize everything, lest we be a communist state. However there are definitely things, like banks, that should have a public competitor.
Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build.
This implies said companies have already “won,” and that they’ve made (a lot of) money.
Your comment would make more sense if I was calling for the transitioning to communism.
Uber, for example wouldn’t be nationalized because its product type hasn’t become so pervasive that a majority of Americans use it. Debit cards and their ilk have.
[0]: https://en.wikipedia.org/wiki/Public_utility [1]: https://marketrealist.com/p/are-utility-companies-public-or-... [2]: https://www.law.cornell.edu/wex/public_utility
Not sure how you would draw this line.
Do we nationalize the apple/google app stores because they are taking 30% cuts? Or Visa/Mastercard/Stripe because they take a cut on every transaction?
There is noting implicit that means they don't make money. The process of nationalization doesn't have to result in 0 compensation, it could be run like any other buyout. That being said being government run has its own issues.
So your real problem is that the government offers a service? So we should get rid of public fire departments, police, schools, and roads?
I do think that if you take an existing market with competition, and you nationalise one or more actors in that market, competition becomes very difficult for any remaining private actors in that market or any future entrants. The reason is pretty simple: the rule-setting body is now playing the game against you. The end result of this is that new actors are less likely to enter the market at all, which limits innovation.
Because of this (and because of the historical record of failure almost every time this kind of thing is tried) the decision to nationalise should be taken very carefully. You list several things such as fire departments and roads which are arguably best provided by the government, but I don't think it's obvious that retail financial services should be added to that list.
Neither do I especially, I was only questioning your reasoning for opposing it.
Not to mention the purpose of the government is to serve its citizens, not just entrepreneurs.
Any industry likely to be nationalised would have an overall depressive effect on the number of risks taken on new products and services in that industry.
This is a good way to not get future PayPals or debit cards. The fact that even Beijing isn't taking that path should show how extreme it is.