As someone who's clients are all Chinese - there is not a better time to be in the Chinese market.
China is quickly translating into a service powerhouse, I wouldn't be surprised if china will stop needing wallstreet to finance itself within the next 5 years.
If you are in the SaaS business - china is where you need to be to make bank. Chinese millennials are rich, optimistic and are amazingly good adopters of technology.
The chinese software market is also extremely young - unlike the saturated western ones. So even building simple service-automation/web-service will make you millions.
Its almost laughable to me these days that an amazing company like netflix can only charge 5 dollars in america while in china people are spending insane amount of money online for really simple services.
"Its almost laughable to me these days that an amazing company like netflix can only charge 5 dollars in america while in china people are spending insane amount of money online for really simple services."
I'm not sure where you get this impression. Online services in China are extremely competitive. Netflix is $8 per month in the US, or $10 per month if you want HD. Tencent video in China is 20RMB (~$3) per month. Most of their content is available for free if you don't mind ads.
Incomes in China are largely equal in number to about double the number, disregarding currency conversion. For example a low end worker in the USA makes 1000 USD a month while a similar worker in China makes 1000 rmb. A fresh graduate engineer may make 5k USD a month in the USA and may make 2500 to 10k rmb depending on skill and location in China.
That said 20 rmb should not be considered 3 dollars, it should be viewed as 10 to 20 dollars.
Some more points of comparison: Average hotel 100 rmb, breakfast 10 rmb, cell phone bill (depending on data) 50 to 200 rmb.
These prices are simply not true. 1000 USD per month in the US will get you much more than a 1000 RMB in China. For 100 RMB you can only find a roach and mold infested hole in a tier 3 city, there are no hotels at this price in cities like Beijing or Shanghai. Yes, you can buy a jianbing on the street for 10 RMB or less, but it is the equivalent of buying a street hot dog in New York and calling that "breakfast". Something a sane person can call breakfast will be at least 20-30 RMB, still with no guarantees that your food isn't cooked in recycled gutter oil.
I'm not sure your post supports the premise that I was trying to refute (that "people are spending insane amount of money online").
Also, comparing the lower levels of income as a guide to affordability is tricky, because China has much greater income and wealth inequality than the US (Gini coefficient ~0.7 vs. ~0.4 for the US), so you're focusing exclusively on people with very little disposable income.
Well when you compare the average income of an American vs Chinese which haven't reached even Japan's level, I would say Japan would be a better market for SaaS considering they have the money to pay (or should according to income levels).
Also consider the non existant IP laws or any type of bad actor reducing enforcement mechanisms that exist in North America and Europe, means you are in a much more crowded and competitive market.
The median income in China is between 1/15th and 1/20th that of Japan. I don't think it makes much sense to compare any first world nation to the median income (or average either) in China.
This is an important point. Marginal income increases for the already wealthy does little to support domestic consumption. In economic parlance, the rich have a low marginal propensity to consume. In China's case specifically, the rich are more likely to see any additional income as capital they need to get out of the country (hence China's progressive tightening of capital controls).
On the upside, it means the Chinese government have an obvious demographic to target with a stimulus package: the poor. They have a very high MPC because they need to spend every additional dollar on things like... food.
EDIT: Just to give you a sense of how crafty the rich and corrupt are when it comes to capital flight from China, again from HSBC:
Meanwhile, imports from Hong Kong surged by 88% in February, but we think this was because of base effects again rather than increased over-invoicing activities compared with previous months – the level of imports from Hong Kong is actually down in Jan-Feb compared with in Nov-Dec 2015.
I am an American working in a Chinese tech company, and I was also curious to know where you get this sense of being willing to spend more. Most of the Netflix/Spotify/Dropbox/Hulu equivalents are far cheaper and have far more extensive free options than in the West. Some companies certainly make bank on online games here though!
Aside from that, I agree on the market being young and having different possibilities here than in the west, and also with people being good adopters of technology.
No one is saying you can't make money in China anymore, only that the data coming out of China is really bad considering their huge growth over the past 20 years. They have a growth target between 6.5% and 7%, in the U.S. we would kill for that...but in China that is very much subpar.
I agree with you - its irrelevant to the discussion at hand.
What I am merrily pointing out is that as china moves from a export oriented country into a service based economy, Reducing its import/export is a target . Since their own leadership wants china to transition to a "new normal".
China has a huge cannon ( in terms of controlling a vast amount of humanity's capable hands ). It seems now instead of using it to awash the world with manufactured good they are refocusing it on services.
Measuring output from services is extremely hard - since its investment in human capital, rather than physical goods.
The point I am trying to make is that this is a good thing. It means their is going to be investment in law,education,fiance,software,intellectual property,health-care ...
This will give breathing room for other developing countries to take up china's slack and allow china to innovate in the place where it really helps humanity move forward. We all want cheaper healthcare and cheaper education.
It's good news in the longer run (more than 2 years,) in the short run it can cause serious problems for global markets are they adjust to the new environment. The big time bomb from this is the debt market taken on by commodity based companies which could infect investment grade bonds.
US citizens getting worried about China's finances and growth are akin to peasants getting worried about the finances of noblemen.
Right now the US Congress is seriously considering giving corporations a "tax forgiveness" to the tune of $400 billion. When US citizens are abroad, they have to pay US taxes even if they haven't set foot on US territory for years. That rule doesn't apply to corporations. Do you find that fair?
The establishment media continually fools US citizens by giving them distractions such as: "China is crashing!!!" - "Chinese growth is going down!!!" - "Corruption in China rampant!!!" - "China preparing for WAR!!!"
Easy distractions like these have only one purpose: to distract US citizens from noticing that they are being defrauded by everyone they put in charge to run their country. It's as simple as that.
> I wouldn't be surprised if china will stop needing wallstreet to finance itself within the next 5 years.
China doesn't currently need Wall Street, they have their own powerful central bank and tons of domestically held debt thanks to their very high export surplus and savings rate.
You know how I know when to pull my money out from the stock market? When your neighbor tells you to invest money in the stock market. The idea is that there's a big lag between when the smart money have left and when ordinary people start crowding in.
Same with China. Now I'm hearing from friends somehow China is the place to be that gravity is Falun Gong and doesn't exist and China will overtake United States in 10 years, and other extreme optimism that reminds me a lot about past bubbles.
But I'm interested to know if you have any source on SaaS in China.
I am optimistic about China in the long run but not with the current communist government. Only when China is unrestricted from free trade of knowledge, information and expression, only when such basic human rights guaranteed in other developed Western nations are present, can China truly become something worthy to be taken seriously.
Who want's to live in a China even Chinese people don't like or want to stay in? If you haven't noticed all the rich chinese people are getting the fuck out of China, people are so desperate that they are willing to embezzle, corrupt, steal, kill, fuck over anything or anyone. You really expect SV companies to uproot and start a new life in China?
> Who want's to live in a China even Chinese people don't like or want to stay in
It seem's that you are naive. Rich people are leaving because the standard of living is higher at the moment, but this will change. China is still developing, having spent the last 50 years lifting hundreds of millions of people out of poverty. Meanwhile, poverty in the US has increased to 14%. China will overtake the US as the dominant global superpower this century.
Well, the "50 years" claim is simply not true, the whole lifting out of poverty thing started with the opening up and the influx of foreign investment to use cheap Chinese labour after Deng Xiaoping took power in 1978. Before that, the Chinese leadership under Mao were doing their best to drive all of China into poverty and famine.
Have you ever been to China? I've lived in China over for 10 years until 2011, and it has always baffled me how so many foreigners were saying that China will be the economic superpower of the 21st century, and all I saw was a nation of poorly educated people with a cult of money, lack of any kind of moral compass and rampant corruption deeply embedded into the fabric of society. To be fair, it also had more or less developed infrastructure and lots of cheap labor that has made manufacturing in China profitable for international companies. I was trying to be positive and kept repeating the "in China it's different, they have a special Chinese way" mantra. Well, now the Chinese economy has now been exposed as the pyramid scheme it has always been and there is no light at the end of the tunnel.
I see your claim that "the standard of living will change" as absolutely laughable, as any people who are capable of changing that are busy getting out of China, ideally forever. Whoever is left only stays to reinforce the status quo.
Whoever was saying that "China is the future" in 2006 was at best a naive optimist. Whoever is saying that in 2016 is delusional.
> Before that, the Chinese leadership under Mao were doing their best to drive all of China into poverty and famine.
Drought is widely seen as the fundamental factor the caused the great famine. Government policy was one aspect that was poorly implemented. It is easy to say in hindsight - but this was a national emergency on a scale that no other country had experienced.
Even the official stance of the Chinese government, the one being taught in schools these days, is that "the disaster was 30% due to natural causes and 70% by mismanagement". With the tendency of the CCP to invent any numbers that favour them, I'll leave it to you to guess what the actual causes were.
There's also the fact that proper communist china still lingers in the collective consciousness like IE6 does in webdesign.
There used to be the communist party doctrine that individuals with possible grudges against the party within 3 generations would not be granted party membership. Some people that have money now would still count for this rule, which is another reason they might want some cash abroad.
You'd better get used to that Chinese government, it's here to stay. Besides, what do you want? For the Communist party to devolve into US congress?
And about those supposed Chinese people who don't want to stay - just like some minority of the US population doesn't want to pay their fair share of taxes or contribute positively to their local society and have thus mastered the shell company and tax haven game, there exists an equivalent minority of the Chinese population who don't want to do their part either and who are well-off enough to be noticed by foreign media when they move in expensive neighborhoods in western countries. The Chinese population being higher, that percentage of rich people fleeing will also be higher.
And about China being taken seriously - are you really that naïve NOT to take them seriously? Do you not take the formidable number of Chinese people that have been lifted off abject poverty seriously?
Do you not take the millions of kilometers of railroad that have been built both within and outside China by Chinese companies and people seriously?
Do you not take the infrastructure that has been built, no questions asked, in Africa seriously while western nations have only taken from Africa while giving nothing in return except conflict and weapons?
Do you not take seriously the information that a Chinese company, COSCO, recently became the operator of Greece's ports?
Do you not take seriously that Chinese entrepreneurs, often being from a modest background themselves, left their country for Sub-Saharian Africa and Egypt and even Ethiopia and have become of the main providers of employment and growth and even HOPE-you-can-believe-in in those countries?
I'm not a "China thumper", I'm not Chinese or even Asian - I just see the world as it is. I've seen the corruption in US government and I know about the pentagon's revolving door. It's also obvious that the British and to a somewhat lesser extent the French governments are sellouts of the oligarchs. If you want to argue about corruption in the Chinese government know first that their officials and their families are shown what life is like in prison when they take office so that they know the consequences of temptation.
Maybe next you'd want to argue that China allegedly "stole" some islands in the South China Sea and is now threatening everyone, allegedly. Well, I'd argue that in 2011 an agreement was reached among SOVEREIGN (very important here and thus in caps) ASEAN nations and the Philippines decided to call in the oh-so-righteous United States to get things moving in their favor, thus the current clusterfuck.
And besides the US and Britain already set the precedent by stealing the Chagos Archipelago and within it, Diego Garcia. Also note that they also unceremoniously removed all the inhabitants of these islands who were only allowed to carry ONE SINGLE BRIEFCASE worth of their possessions when they were put in the bottom of boats where quite a few got ill and even died.
Then the US and Britain went on and declared the Chagos a marine protected area to obliterate any possibility that the Chagossians could return to their land.
A marine protected area where they could safely keep nuclear weapons...
What China is doing in the South China Sea, building islands and infrastructure to fight against piracy and more important, ensure safe harbor for ships in a world that will be increasingly affected by climate change, is patty cakes in comparison to what western nations have done.
I believe the world needs balance - therefore it can't all be the oh-so-righteous Western system of "governance". A balance of power, a balance of opinions, a balance of superpowers. And having seen how corrupt and destructive Western governments have been and can be, my opinion -and mine only - is that China represent a good counterpoint to that corruption and destruction. China represents progress and hope in the long run. It's more likely that universal basic income and a post-scarcity society will come,and will be sustained, from Chinese culture and system of government than anywhere else. Why? Because it's the country where even farmers are crazy enough to build helicopters, submarines and robots for a hobby and in this world, the ones who are crazy enough to think they can change the world are the ones who do.
> I think you are a shill paid by the Chinese government
On HN you can't accuse other users of being shills or astroturfers without evidence. An opposing view does not count as evidence. Please don't do this again.
There's nothing about it in the guidelines: https://news.ycombinator.com/newsguidelines.html Anyway, this is noted and I won't do it again for the sake of civility, but the the claims made by the poster are so absurd I would have no problem saying it in a face-to-face conversation.
Yes. The links you've posted have nothing to do with China and are irrelevant to the conversation. "The US and Britain have done bad things, so China can do them too" yet again.
You said my claims were false. I say these links are relevant because the US and Britain have set a precedent with respect to the unilateral appropriation of territory and therefore have no leg to stand on when they criticize China for building islands in the South China Sea. If you can't understand that, you should seek professional help.
As someone who's clients are all Chinese - there is not a better time to be in the Chinese market.
China is quickly translating into a service powerhouse, I wouldn't be surprised if china will stop needing wallstreet to finance itself within the next 5 years.
If you are in the SaaS business - china is where you need to be to make bank. Chinese millennials are rich, optimistic and are amazingly good adopters of technology.
The chinese software market is also extremely young - unlike the saturated western ones. So even building simple service-automation/web-service will make you millions.
Its almost laughable to me these days that an amazing company like netflix can only charge 5 dollars in america while in china people are spending insane amount of money online for really simple services.