Geopolitics and doing business in Hong Kong and China.

I’ve been in China to visit the 6th World Internet Conference and Exhibition (WIC) that was held at the purpose build exhibition centre in Wuzhen, Zhejiang Province.  The focus this year is on AI, Internet of Things, and Cyber security. This latter topic is a hot one in the West and, for some, maybe a somewhat ironic one to be a focus at a conference in China.

I’ve also visited Nanjing, Shenzhen and Hong Kong where I met with Huawei, CEC Innovation Centre and Shenzhen University to discuss innovation and financing. 

I always enjoy coming to China and mix with the people and get a view of the world from their perspective.  The technology focus is very strong at WIC and the Wuzhen-Tongxiang area is full of technology startups from electronic vehicles to applications that measure individual health through a body assessment adopting Chinese medicine and a mobile phone!

In last year’s exhibition there was a strong focus on surveillance technology, and this is still represented – facial recognition and assessment of one’s age and attributes is an interesting experience and I was pleased that I appear more youthful than my actual age.  Perhaps these technologies are not infallible, and I’m told that beards can be a problem, too.

The press of energetic young people and their universal enthusiasm for new tech is evident and there is no doubt that the compounding influences of youthful population and new ideas is the basis for China’s continuing technology growth.  The strength of 5G and its application to automotive products was clear as there were several stands with passenger cars and buses that combined to demonstrate how 5G and traditional technologies are merging.  BMW, Iveco and Huzon had concept vehicles on show all demonstrating how old and new technologies are merging and creating new outcomes for consumers.

If the only countries with credible 5G technology are to be found in China and Europe, then there are interesting times ahead for some countries as these technologies develop.  I understand that Huawei is the leader with Nokia and Ericsson close behind.  There are no US companies in this space which I find remarkable and which could reflect the difference between a capitalist system where markets rule and one where industry strategy also has a major role.  This is something that needs to be thought about in Australia, the UK  and beyond as the government in China, through organisations such as CEC, is backing innovators by providing facilities and finance. And, not just Chinese innovators but companies from Switzerland, Italy and the UK have been prepared to set up in CEC’s facility in Shenzhen and develop their product there.

China has encouraged technology development as a key part of its ‘Made in China 2025’ strategy and private companies such as Huawei have built on existing knowledge and leapt ahead.  A feature of this is the fact that China’s late economic development has enabled it to by-pass serial development and go almost directly to the Internet of Things.

Despite being branded ‘The World Internet Conference’ it is a show place for Chinese innovation. Yes, there are stands from SAP and Google, but these represent their respective Chinese operations.  There was a relatively small International Pavilion – small I guess due to the lack of interest of foreign companies, perhaps?

I was pleased, though, to see some Australian representation in the tech space. The Australian Sports Technologies Network brought together several companies to exhibit.  It’s good to see as some of these companies are planning to invest in China rather than just sell to China that seems the preferred strategy of most Aussie companies engaging with China.

I also came across a lone British company in the air purification and filter business who had a JV with a local company.  They are now establishing a bigger presence and are setting up an office in the Smart Sense managed ‘Designed in Wuzhen’ building.  I asked how much support they got from the UK government and the CEO said “Zero.  They’re so immersed in Brexit that they have no time to focus on trade.”  The irony of this was not lost on either of us.

Intellectual property is always brought up as a concern when doing business in China and there is no doubt that reverse engineering of western tech was a feature in the past (and probably still is) but you can now safeguard your rights with patent registration in China.  In China the first to register or demonstrate a design wins the rights in China, so even if you never trade in or with China not having IP covered off could be a problem should someone take the idea and enhance it.  The government is working to improve these safeguards and it is no longer like the Wild West days of the 80’s and 90’s as China now needs to protect its own IP and seems genuinely keen to work with foreigners to establish an innovative economy.  But many foreigners are fearful of working with China and the US has raised the fear levels regarding working in the high-tech sector with China.  This is, perhaps, understandable given the authoritarian nature of China and I will discuss this more in my next blog.


Gary Garner

Gary is a senior executive, management consultant and corporate adviser. His extensive international business experience and technical knowledge enables him to achieve strategic change for clients with an international focus and advise business leaders on new market entry. Gary has special expertise in advising on financial feasibility; market analysis; corporate and project finance His preferred areas of geographic focus are China and the Middle East and he works across a range of industries with clients in Hong Kong, Shenzhen, Wuzhen-Tonxiang and Dubai.

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