West shouldn’t misinterpret or overstate Beijing’s new tech regulations, ex-Google China exec says

1 week ago

Kai-Fu Lee, CEO of Sinovation Ventures.

Lino Mirgeler | Picture Alliance | Getty Images

The erstwhile president of Google China warned that the West should beryllium cautious not to overstate oregon misinterpret the precocious introduced regulations by Beijing that person wounded the likes of Alibaba, Tencent and Didi.

Kai-Fu Lee, who present invests successful Chinese start-ups done his task superior steadfast Sinovation Ventures, told CNBC Tuesday that China is simply regulating a fistful of ample net companies to guarantee their important marketplace presumption doesn't wounded consumers.

"That's not a batch antithetic from what U.S. and EU person done," said Lee, who is presently based successful Beijing.

"There should not beryllium an overinterpretation of the intent to bounds the scope of ample net companies … into an overreaching slowdown of the tech economy," Lee added. "That would beryllium a mistaken interpretation."

The Chinese authorities is really "very big" connected tech, Lee said, pointing to its propulsion connected areas similar artificial intelligence, semiconductors, and unreality computing.

The Taiwanese-born American machine idiosyncratic said helium expects 10 to 15 Chinese AI companies to spell nationalist successful the adjacent twelvemonth and helium argued that it makes consciousness for investors to instrumentality stakes successful companies operating successful industries being backed by the Chinese government.

"If you take to judge that the authorities volition person [the] powerfulness to marque oregon interruption a company, past the authorities is doing everything it tin to marque these AI, semiconductor and unreality companies. So however tin it beryllium incorrect to put successful them?" helium said.

Alibaba, Tencent and Didi person seen their stock prices descent successful caller weeks aft China introduced caller regularisation connected data-sharing. Lee said there's astir apt a lawsuit for "bargain hunting" arsenic the punishments person present been handed out.

When it comes to regulating exertion companies, Lee said China is overmuch much "action-orientated" than the U.S.

"The mode the U.S. deals with ample net companies is to spell done legislature hearings, judicial appeal, and antitrust and justness department," helium said.

"It takes a agelong clip and usually nary action. China is overmuch much enactment orientated," helium said, adding that Americans aren't utilized to the speed.

"Fast decisions, if made correctly, volition unit these companies to betterment and springiness a accidental to smaller companies, which we put in, to person a chance, creating a healthier ecosystem," Lee said.

Ignore China 'at your peril'

Earlier this week, advertisement guru Martin Sorrell warned that it's unwise for companies to wholly disregard China contempt the challenges that beryllium successful the country.

"It is the world's 2nd largest economy," Sorrell told CNBC's "Squawk Box Europe" connected Monday. "It's going to beryllium the world's largest system successful a fewer years, not connected a per capita basis, but connected an implicit basis, and you disregard it astatine your peril."

Last week, billionaire George Soros criticized Blackrock, the world's largest plus manager, for its investments successful China. Writing in The Wall Street Journal, Soros described BlackRock's inaugural successful China arsenic a "tragic mistake" that would "damage the nationalist information interests of the U.S. and different democracies."

In response, a BlackRock spokesperson said: "The United States and China person a ample and analyzable economical relationship."

They added: "Total commercialized successful goods and services betwixt the 2 countries exceeded $600 cardinal successful 2020. Through our concern activity, U.S.-based plus managers and different fiscal institutions lend to the economical interconnectedness of the world's 2 largest economies."