2/7/22 Tech Buzz China Insider Digest
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Insider Digest 2/7/22: Recommendations for Chinese Digital Platform Regulations, It’s the Real Economy, Stupid, e-CNY: The Product and AI Salaries
Housekeeping / Announcements / Fun:
TBC Syndicate: Thank you so much to those who responded to the call to fill our unexpected syndicate allocation last week. I generally use a separate mailing list for deals there, so make sure you sign up here to be notified if you are interested in participating in the future. Insider subscribers will get first dibs in the future, and we will likely also offer a reduced fee for you. By the way, we will also be offering allocations to non-China based deals as well that come through some of our deal partners and my personal connections, although the focus will be on China.
If you’re at all watching the Olympics you probably know that Eileen Gu (San Francisco native now competing for China) won the gold medal in Women’s Big Air today. No worries if you have no idea what this event is about (I didn’t either), but this is the clip that is being played over and over in China today as the country celebrates their “frog princess” (her handle on Chinese social media, where she is pretty active). She’s basically the face of the Olympics in China at the moment and in my opinion really could motivate more little Chinese girls to go into winter sports, as is her stated passion. As you might expect, US coverage of her tends to emphasize her defection to the Chinese team despite her American birth, while Chinese articles primarily ooze with admiration for her academic achievements (she’s going to Stanford) and focus on her mom’s parenting methods (not what you’d expect, as she calls her mom a “rabbit” mom, the opposite of a tiger mom).
China just came back from Lunar New Year holidays today, so it’s been pretty quiet. We’ll see what the next week has in store!
2/5/22 Worth Reading: Jiang Xiaojuan's Thoughts on Digital Platform Policy
[Interconnected Blog]: e-CNY: The Product
[ChinAI Translation]: The AI engineer salary myth is coming to an end
2/5/22 Worth Reading: Jiang Xiaojuan's Thoughts on Digital Platform Policy
Jiang says that the overwhelming complexity and size of the new economy's digital platforms make it seem as if they are "too big to be regulated." But in fact, the solution is to focus on compliance, have different regulations for different platforms, use technology to regulate, balance interests, direct values, and agile regulation.
In modern China, there have been 3 eras of regulation: 1) industry supervision stage (1949-1992), 2) independent supervision stage (1993-2008) and 3) overall / comprehensive supervision stage (2009-present).
At present, the regulatory ecosystem is 1) multi-party, meaning that in addition to government bodies, consumer-led and independent agencies are also involved in coordinating oversight; 2) really focused on learning from international standards and cooperating with global bodies; 3) heavy reforms, with the direction of letting the market play a bigger role in resource allocation, while strengthening regulation afterwards.
Whereupon, Jiang and her team has 6 recommendations for policymakers:
1. Focusing on compliance regulation.
2. Have differentiated policies for different platform types.
3. Increase algorithm regulations, focus on open rules.
4. Ensure fair competition between platforms, balance interests between multiple parties.
5. Externalities and supervising the direction of social values.
6. Administratively, regulations will need to be agile and iterate quickly.
[Oped]: It’s the Real Economy, Stupid
In recent months, there’s been a lot of noise made about China’s pivot away from “soft tech” (the internet) to “hard tech” (e.g. semiconductors). It’s an intuitive distinction, because unlike in English, where we use the word “tech” as a catchall, Chinese separates “internet” companies from “science & technology” driven ones. I was even taken in by this easy narrative initially myself, not least because it would sometimes show up in joking banter with Chinese tech entrepreneurs and employees. But humor is not reflective of reality, especially when reality has been coming in the form of a steady stream of clarifying government documents and actions in the last year.
In fact, at this point, I’d argue that anyone who insists that China is uniformly suppressing soft tech in favor of hard is simply being anti-factual. There is a division, yes, but it is not between the internet and semiconductors. It is between the real and financial economies. To the Chinese government, any technology that helps the real economy, the part focused on the production of services, rather than financial services, is encouraged. The rest? Not so much.
External link from Interconnected.blog: e-CNY: The Product
The e-CNY’s product can be separated into a “hard” version and a “soft” version. The hard version has a physical element to the onboarding experience – ranging from a card with a specific amount similar to a prepaid Visa card, to a smartwatch, ski glove or badge. Most of these “hard” versions are limited to the Olympics “bubbles”, designed to show off this digital currency in the most Olympic-themed way possible.
The “soft” version, aka a software app you can download onto your phone, is more complex and intriguing. It has four different tiers, separated by different levels of registration requirements and transaction limits. Here is the breakdown:
Tier-1:
Requirements: cell phone number, valid ID, personal bank account
Verification process: in-person verification and signature with an authorized operating institution
No limit on account or transaction limit
Tier-2:
Requirements: cell phone number, valid ID, personal bank account
Verification process: in-app
Account limit: 500,000 RMB (~78,000 USD)
Single transaction limit: 50,000 RMB (~7,800 USD)
Tier-3:
Requirements: cell phone number, valid ID (no bank account needed)
Verification: in-app
Account limit: 20,000 RMB (~3,000 USD)
Single transaction limit: 5000 RMB (~780 USD)
Tier-4 (the “anonymous” tier):
Requirements: cell phone number
Verification: in-app
Account limit: 10,000 RMB (~1500 USD)
Single transaction limit: 2,000 RMB (~300 USD)
[ChinAI Translation]: The AI engineer salary myth is coming to an end
I tweeted about this article but realized that ChinAI had translated it in full and so I include it here. It does have a graph on US AI salaries declining that many folks reflected as being not consistent with their personal experience … so take it with a grain of salt.
The "Artificial Intelligence Talent Report" released by the Internet recruitment platform Lagou in 2021 shows that the talent demand index of the artificial intelligence industry in 2021 will increase by 103% compared with last year, and the average salary will be 20,000 RMB, an increase of 12.4% compared with last year. According to Lagou’s estimates, there is a shortage of 1.7 million algorithm talents.
However, we need to see some "distinctive features attached to industries.” In other words, in different industries, AI engineer salaries may vary widely.
For example, many headhunters have reported to Huxiu that autonomous driving salaries are not only high but even continue to skyrocket in 2021; while vertical industries with more relevant applications such as "voice" and "text" tend to stabilize , and even experienced a downward trend.
Finally, make of this what you will, do note that this is for CNY only and NOT indicative of the remainder of the year, which fared a little better.
Chinese New Year Travel data (up to 2/3/22). Comparison vs. previous years show a HUGE drop from pre-pandemic 2019. Data is up vs. 2021 but still ~50% or less of "normal."
Top Left: Rail (+38% YoY)
Top Right: Road (35%)
Bottom Left: Waterways (+11%)
Bottom Right: Air (+48%)
Have any comments or questions? See you on the Discord server!
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