The number of Chinese students staying in the US after graduation has been relatively steady for the last 10 years; the number of Chinese students coming to the US, in contrast, has exploded, pushing the stay percentage down.
There's no point in staying in the US after graduation, if you were born in China or India. Because, instead of exploring your entrepreneurial interests during the golden years, you are shackled to an employer with an H1b, waiting to get a green card for at least 25-30 years after graduation.
Instead of spending time on the product, or building a team, you have to waste time with idiotic immigration laws that were not written keeping the current tech jobs in mind.
So, even if you see an Indian or a Chinese grad stay back in the US, there's very little chance that they end up being entrepreneurs funded by VCs (unless they are from the top 10 universities in the US and started on their venture well before graduating). Not sure about China, but there are quite a few examples of Indian nationals fed up with US immigration laws, going back to India and startup a VC backed tech product company, valued over $100 million.
From what I have been seeing, the number of both Indian/Chinese students coming to the US for studying has gone down post the Trump administration. Also, I am seeing more Indian/Chinese folks going back home due to increase in engineering wages/opportunities. Of course, it's still not comparable to US but plenty-enough to live a very good life-style back home.
I’m not sure if it’s gone down during the last 1.5 years of the trump admin, but it has exploded in the last 10 years. Looking at the data. Looking at the change for any given year is a bit noisy.
China has really great wages for programming (I should know), but lacks in many quality of life factors. For example, many Chinese won’t go back once they have kids because of educatio, hukou, and pollution factors. They would have to pay a lot to get around those.
Why is that a problem? Any other country could also open its border to "brains" if they wanted too. The world would probably be better off if smart people (or really any one) could easily migrate to where they can be happiest.
Geographic intellectual centres tend to be very strong natural monopolies.
Mind: my own theorising, though based on a considerable bit of research.
Monopolies, generally, tend to form around networks, most generally described as flows (material, energy, products, people, information), between nodes, with some cost function. That last isn't just the traditional capital and labour, but a larger set, generally: materials, energy, time, effluent, skill, technical knowledge, O&M, comms protocols (including language choice), access to finance, frictional losses (from hull drag to bribery), and yes, labour and capital.
I'd also add unintended consequenses, though that's a long aside.
Different locations may have favourable or unfavourable standing among various of these factors. Comparative advantage (and disadvantage).
Something like Kirchoff's law of circuit flow may apply, I'm looking into this. There's some prior art, I believe associated with Jules Dupuit.
Edward Glaser, Harvard, makes the interesting observation that cities are an exception to the Anna Karenina principle: major global cities tend to have their own individual focus of competence. This seems particularly the case for ephemeralised goods: television (centering on NYC again), cinema (Hollywood, though, via language frictions, also Bollywood), finance (NYC, though with regional centres in London, Frankfurt, and Tokyo). And of course the San Francisco Bay Area for software, thoughthere are a few other competing centres, notably again NYC.
Glaeser also notes that diverse cities with non-monolithic industries and corporate footprints, tend to maximise diversity -- hecontrasts NYC's garment industry with the company towns of Ford's Detroit and Carnegie's Pittsburgh.
(The bulk material, energy, effluent, and labour requirements of early-20th century auto and steel production are other aspects he fails to dwell on, to his loss.)
But there are also things ccities need to get right: a baseline. Size. Food and water supply. Waste removal, public health, and crime prevention. Transport and tradee. Comms. Quality of life. Fail in these, and aa city wwill decline (though economic failure seems the more apparent proximate cause).
For intellectual and creative activities, opportunity, freedom, removal of barriers & hassles, and lack of oppression, seem key. The mid-20th century transatlantic flow, in both directions, of European Jews west, and American Blacks east, is a particularly inteeresting case: a given location can simultaneously attract and repell.
There are other dynamics: Dutch Disease, Baumal's Cost Disease, Gresham's Law (particularly applicable to brain drain), probably Jevons and Leibig's law.
But getting to your assertion, simply opening borders is far from sufficient.
>Any other country could also open its border to "brains" if they wanted too. The world would probably be better off if smart people (or really any one) could easily migrate to where they can be happiest.
And perhaps we could dispose of the not-so-smart left behind while at it...
Nowadays skilled ones stay back in India working in startups. Those who were not able to get campus recruited from the colleges in India go for Masters in the US for a second chance.
Anecdotally, majority of them are not high skilled. Masters/PhD should not be used as a valuable metric for green card consideration.
This was my experience in a low-tier US master's program. Most of the students from India were doing it for the second chance at making engineer money.
What country, at least specify in US or out of US. I can't even speculate. Tear down the idea of giving green cards, you mean that people out of the us with ms/phd are not so good. Support the idea of giving green cards, the existing ones in the us are good, the bad ones left? Sorry, can't parse it. :-)
I live in a third-world country and every single ms/phd I have met were nothing but incompetent.
Edit: I don't know why you are downvoting this but in this country most degrees are bought with money and the ones earned without bribery are earned in an environment where expectations from students are a lot lower than, say, in US.
sad part is, even a founder who is a US Citizen, has to waste copious amounts of time navigating these idiotic frustrating US immigration rules, because the star engineer they have is an immigrant.
Nanotech
I won the lottery while doing my PhD in the US. PhD was really a good time but I should basically have left immediately after I finished. Total waste of time afterwards.
Curious: were you born in China and still eligible for the lottery? I thought Nanotech was a much coveted field to be in
This is exactly why merit based legal immigration would push US back into the pole position, if it was done right. Lottery green card is basically a new way of excluding people from China and India from immigration, in the name of diversity.
Current situation for high skilled immigrants from India in US, is basically to cross the border to Canada, with it's amazing Express Entry scheme, which treats all immigrants the same, and evaluates each one based on the same scale (of education qualifications and work experience). Unlike the US, Canadian high skilled immigration rules don't discriminate based on country of birth!
My guess: In 10 years, Canada will be giving the US a tough competition for global VC spend
"Curious: were you born in China and still eligible for the lottery?"
I was born in Western Europe. I am not Assian.
"I thought Nanotech was a much coveted field to be in"
Me too, but as mentioned before, Ideas are like hemorrhoids. This was mine.
Not sure why. Wrong time. Wrong coast. Bad luck.
I had an interview at Agilent. They had 500 applicants. You needed to have a PhD or MBA or both. I was among the last three candidates and they congratulated me, "you got the job". Then they axed the job. There was just a curse on me. Really don't want to think back about that time. Started over in China with nothing. Was basically an illegal immigrant there.
What would you prefer: to live in a foreign country with lots of competition, all day working, or live in your native country, few skilled competition and huge quality of living?
Most people want to live in their own country , with their family, their friends and their language.
Chinese people have elders to care. In China family is sacred to a level individualistic US can not understand.
>>>In early June, news broke that Ant Financial, an electronic payments service company affiliated with Alibaba, had raised a staggering $14 billion in what’s technically a Series C round. To date, it’s the largest venture funding round in history. Led by Temasek Holdings and GIC (a Singaporean sovereign wealth fund), the round reportedly values Ant Financial at $150 billion. For perspective, that’s roughly twice Uber’s valuation and within spitting distance of Amazon founder Jeff Bezos’s current net worth.
Hmmmm, just shows how little I understand about evaluation and/or VC because this seems crazy to me.
Ant Financial is handling ~$4 trillion in payment processing annually. They have about half of the Chinese mobile payments market in Alipay (WeChat has something like 35-40%). They've moved into numerous financial segments.
They had about $9 billion in revenue in 2017, and are nearing a billion users.
The $150b valuation is rich, however it's about 1/3 to 1/4 the PE ratio that Amazon and Netflix are being given currently. At $150b it's trading for ~85 times net profit.
The business is wildly profitable as you might expect. In terms of size, consider how big Visa, Mastercard, PayPal, etc. are.
Visa now has a $294 billion market cap. That's based on $18b in sales and extremely high margins. Mastercard is worth $204 billion. PayPal is worth $100 billion; Ant Financial will be larger than PayPal in terms of sales within 12-24 months (and is comparable now in profit).
The big risk regarding Ant Financial, is that the Chinese authorities are afraid of it and have begun boxing it in with controls. As one might expect, they don't like the idea of a single corporation controlling so much of China's financial flow (unless it's very firmly under the boot of the government).
Why would a company with such massive revenue need to bring in so much external capital? Wouldn't the current stakeholders be better off keeping more of the pie?
Keep in mind $9 billion in sales is not quite massive revenue in the pool that Ant is now swimming. Their financial footing is not nearly so large as their scale of processing, they've only begun generating meaningful profit in the last year or two. Google is at $110 billion in sales, JP Morgan is at $94 billion, those are massive.
The dilution of current stakeholders is intentional. I believe it was required by Chinese authorities (my speculation).
I've been following Ant / Alipay with curiosity ever since Jack Ma stole it from Softbank and Yahoo (along with the rest of Alibaba shareholders). There have been a lot of bizarre things done with the company over time. Jack Ma for example gave himself the large majority share of ownership in the spun off entity, and then proceeded to voluntarily debase his ownership dramatically with no compensation. And now, having screwed Alibaba over with the Ant Financial spin out, Alibaba was recently forced by Jack Ma to buy a chunk of Ant again (33% of it).
My guess on some of these choices, is that it's about nationalism (taking Ant away from foreign owners of Alibaba) and the requirement by Chinese authorities that Jack Ma not have too much power (and that Ant's ownership not be so concentrated in general). If he had held onto the stolen position in Ant Financial + his stake in Alibaba, he'd be closing in on the world's richest person title (~$100b in Ant, ~$30b in Alibaba + cash). That's a spotlight you do not want right now if you're under Xi. I'm certain the Chinese authorities do not want one person owning the majority control of something like Ant Financial, given its size and importance to the economy. There's no other rational reason for Ma to have voluntarily given up so much ownership in Ant, he's shrinking himself as a target (plausibly he was given no choice; I suspect it was always the plan from the moment Ant was taken from Alibaba).
Or put it simply: Ant may end up being worth several hundred billion dollars. Imagine Jack Ma owning 2/3 of something worth $400 billion. Now picture the target on his back, that would go along with such power and control over the Chinese economy. It'd be Jack Ma vs Xi, and Jack Ma would lose; a very dangerous game to play if you're a simple civilian. Better to stay smaller and get to continue doing what you want to do (operate Alibaba and Ant), by giving up some power, ownership, and not being in any way perceived as a meaningful threat to the authorities and their absolute control.
>Or put it simply: Ant may end up being worth several hundred billion dollars. Imagine Jack Ma owning 2/3 of something worth $400 billion. Now picture the target on his back, that would go along with such power and control over the Chinese economy. It'd be Jack Ma vs Xi, and Jack Ma would lose; a very dangerous game to play if you're a simple civilian. Better to stay smaller and get to continue doing what you want to do (operate Alibaba and Ant), by giving up some power, ownership, and not being in any way perceived as a meaningful threat to the authorities and their absolute control.
For a Westerner, you seem to be rather perceptive of such things. The wording for "instant billionaires" among CCP members is "the new class."
It doesn't take long to guess that they freaking hate and loath anybody passing as a successful person and Jack Ma is the prime example of one. Just how full of bile they are.
Ant Financial has been involved in some very dodgy crowd funding schemes (though it is definitely the least dodgy of the bunch), the government has a right to be weary of them.
One of the reasons US-based startups grow so quickly is that the ones with traction here tap into a (relatively) homogeneous 300+ million market. A Chinese company with similar market share potential has tapped into about 4X that market. Growth rate is much faster in such a market, as opposed to global growth that has to deal with diverse sources of friction (e.g. Uber's challenges in London, Paris, etc. vs in the US).
I'm curious about how much of the considerable Chinese population is actually available to market tech products to. Something tells me comparing the populations straight up is misleading.
We did ethnographic research on smartphone usage in China back when I used to work for Intel, back in 2007. Even then, smartphone usage had penetrated the least educated segments. Blue-collar workers living six to a room were heavy users of smartphones, some were heavy gamers.
The percentage of their income they spent on technology and entertainment was more than in the West. The growth rate was also amazing.
Vast majority of Chinese population is available to at least parts of the tech products now. WeChat/Alipay is available virtually anywhere.
It is true that the development in China is very unbalanced, and habits of different groups of people varies a lot. There are also abundant number of tech products targeting each group of people. For example, Taobao has been very popular in large cities for many years, you'd think they've saturated online shopping market. A new startup Pinduoduo launched in 2015, targeting online shopping market in smaller cities and countrysides, managed to acquire hundreds of millions of users there, and they just filed for IPO a few days ago.
> Something tells me comparing the populations straight up is misleading.
Totally agree: once chosen by the Communist Party, a company is likely to enjoy state-sanctioned monopoly status. Not only will they have access to the entire population, the population may have no access to any other service provider in the same sector.
The reality is, three major players Baidu, Alibaba, Tencent are competing with each other in almost every front, and also competing with tons of new challenges like Meituan, Bytedance, etc. The abundance and variety of small startups and their competition is nothing unlike what's happening in silicon valley.
China is going cashless -mobile payments are increasingly the norm. There are two main ways to pay with your phone wechat pay and Alipay(run by ant financial).
It will potentially handle a huge percentage of ALL payments in a country as big as china.Maybe 150bn isn't such a crazy valuation
How rapidly are cashless transactions spreading in China? When I was there back in 2011-2012 everything was exclusively cash-only. I'd be interested to learn the rate of change in recent years.
I live in SF and go back to China about once a year, and every time I go back, I can always find tons of new stuff. For my hometown, the change from exclusively cash-only to cashless happened in less than 2 years.
Extremely fast. I agree with ~2011 being cash only, but the last time we were back (last year?), there was tons of wechat pay usage in restaurants, convenience stores, etc.
>How rapidly are cashless transactions spreading in China?
Basically overnight. Reason? 1. Alibaba and Tencent basically paying cash for people using their system; 2. POS terminal charges for them are near nil in comparison to rapacious rents Visa/MC processing banks were demanding just a year ago.
It seems reliance on electronic pay is a big vulnerability, whenever there's a hickup everything stops. You can make the systems work reasonably well but there will be an outage eventually. In any kind of cyber battle you'd think this would be a huge problem. In the US I noticed most young people also carry little cash, while I'm often paying with cash.
I know in China they also like ubiquitous tracking of people, and maybe the us govt would like that too.
Faster than square, stripe, and venmo did in the US. You can very nearly expect to be completely cashless, including Western credit/debot cards. You'll even see panhandlers with a qr code in front of them.
As a side note: I'm very curious to see what softbank[1] does, they've made an impressive list of investment and Japan generally is in an interesting position[2].
Why is this a concern? The population of China is 3 times as large as the US. If anything, this should be celebrated because resources seem to be allocated more efficiently - Chinese innovation should outpace the United States in the coming years (we’re already seeing this in mobile phones and marginal low end technology like cheap IoT enabled gadgets).
> Chinese innovation should outpace the United States in the coming years
This may be true but it’s not an inevitability, or at least it wasn’t always. Innovation is not just a function of population. Policy also makes a big difference. For the US in particular, immigration policy could make or break its success in tech. See Paul Graham’s famous article “Let in the Other 95%”.
Incredible. It does seem like innovation in US is in a slowdown, with the tech giants being the only ones thinking long terms, and the VCs trying to flip companies to the tech giants on 3-5 year time scales. But very hard to tell what's going on, for me at least.
It just occurred to me that VC spending on the next big thing (usually a try at monopolization by appifization) in a way is a DDoS on the governmental oversight and by extension on the society. Governments may be too slow to react to properly enforce old laws or to create new ones to also cover new grounds. That gap allows companies to rise and profit, but many times at the expense of the society. Governments will probably adjust one way or the other, but I just hope that they will not throw the baby with the bathwater. They probably will, but that's just pendulum going to the other side.
The overwhelming majority of societal harm is inflicted by old, regulated industries like manufacturing, agriculture, healthcare, and retail. Tech-bashing has recently become fashionable as people realized it’s a cheap and easy route to feeling self-righteous, but from a harm-to-society perspective “appification” barely deserves a moment’s consideration.
You are right in where from the current harm is coming. However I think it's just a beginning. Give it a few decades and then we will really see. Whatever happens today will have long lasting consequences in decades to come.
If we let it, we will just repeat out failures from the past, when harmful-today industries barely deserved a moment's consideration from a harm-to-society perspective. It just sounds like an appeal to worse problems.
Also is it that strange to see tech-bashing on a tech news site?
I was walking around my home town recently. It's more than doubled since I left in 2002. Most of the new housing was built as new, dense (10-20 stories) suburbs.
Th urban architecture is not bad. Decent green spaces, so that buildings open into "garden paths" rather than streets. You can get between places using green pedestrian walkways. Conveniently located schools & creches. Most of the parking is underground.
The "economic architecture" OTOH, is striking. There are 2 small malls, walking distance from eachother, where all the cafes, resteraunts and shops are. There are two big commercial/adminstrative buildings where the dentist, post offices and stuff is. There is no high street, no corner stores, or any place that a sidewalk pizza shop could exist. ..no place where an independent retail or service business could exist, not even a news stand.
It occurred to me that not only is this related to "concentration of wealth" it is that concentration of wealth. Those Malls and commercial real estate can be owned by €bn funds. Street level real estate doesn't lend well to that.
Now... A lot of this has to do with the structure of the financial system, how things are capitalized. A developer can approach a large real estate fund, to sell a mall "off the plan." They can then go and presell leases, to their client base.. chain stores and restaurants.
There is no equivalent financial sector that could fund real estate suitable for sole traders. So, sole traders will decline. There is obviously a chicken-egg dynamic between the underlying economics (eg revenue per square meter, and hence rent) and the existence of a friendly capital market. But, I think causation runs the other way as well.
In this case, it just seems very planned. The architecture and planning of a city assumes a certain economy, the urban architecture reflects that, and the underlying capital system reflects that. The three lock eachother into place. If there had been a vibrant market for financing small retailers, but not malls, then the whole city would have probably been built differently.
Anyway China is unidealogical about such things, atm. They don't mind engineering a cityscape for a certain economy, engineering financial markets for a certain cityscape or cityscape or if the proverbial cat is black or white.
My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Ive always been dubious about market liberalism when it comes to banks.
> My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others.
Who gets to pick the winners? Why should those people benefit and others lose? How do you prevent the massive corruption? And why is it time now, not 10 or 50 years ago or 10 years in the future?
..the people who are officially not picking winners now, but effectively are.
It's time now for small businesses because small businesses are now at a massive disadvantage relative to large institutions, for reasons that are unrelated to underlying economics.
It's time now for the VC market, because VC capital is an essential ingredient for making the next generation of companies. If you looked at your major companies in 1978, there aren't many that needed VC to exist in order to be. If you go through the exercise now, you will find that a decent portion of your economy may have hinged on closing a few small (in financial markets terms) on getting funded by VCs at some point.
The liberal purist would probably argue that the availability of VC money is directly proportional to the potential returns to that money, which is in turn proportional to the value to the economy.
I'm agnostic about this in abstract terms. It might be true. In practice though, I think it isn't true. The financial market are limited by, but not shaped by economics. They exist almost outside the economy. That's why we have financial bubbles.
yeah but how does China guarantee my IP? In the US I can sue at least. In China? Good luck. By the time you launch a product, a dozen imitation pops up.
You, as a foreigner, are essentially tasked to upload your expertise and knowledge to a centralized communist power structure that will redestribute the wealth amongst the Chinese population. They don't have the hot clean air spots like Western Europe and North America offers to the elite. I guess ideology is a heavy price to pay.
How about the fact that any number coming out of China can easily be manipulated?
Imagine if every Masters or a PhD grad was given a green card. US would still have been a leader in tech (at least wrt VC spending metric)