Count me skeptical about of some of these 'self-made' billionaires. Pinduoduo for example, as with many Chinese companies, has been accused of falsifying revenues to pump stock prices. Yes, this stuff happens in the US as well (we all remember Enron and Theranos), but to what extent, are the statements of these companies transparent and well-audited, and regulated by government differs by region.
And Bitmain? Is it tech wealth creation to sell pick-axes to desperate miners looking for a gold rush? This looks to me like instead, a zero-sum trade, wherein someone got rich, and everyone else was left holding the bag for a device that would be worthless in a few months.
Of all of those on the list, DJI looks like the most legit, self-made success story, producing a very high quality, Apple-like experience in innovative drone devices, devices now used extensively by the film industry.
Even the legit examples are bullshit, I hate the term self-made (b|m)illionaire because almost all of them came from some kind of privilege that enabled it, and lucky circumstances that precipitate their rise. Take these Atlassian blokes who like to tell the story of starting a company on $20k of credit card debt and a dream to make a living wage without working for someone else. That story doesn't mention they came from rich white families who got them into prestigious high schools and gave them all kinds of networking advantages. It doesn't mention that unlike most of us they could take their $20k debt risk because they already had charmed lives with fallback options that most of us don't have.
Self made wealth is almost always a product of an entire community.
This sort of attitude is really nonsensical. It's the sort of extremism that seems to say: you're only self-made if you grew up in a cave, made your own clothes from animals that you yourself hunted, taught yourself language and built your business while working 80 hours a week as a [worst-job-here]. In other words: a dangerous level of holier-than-thou self-righteousness.
The reality is that wealth and "privilege" are a scale: no matter who you are in the world, there are both people above and below you, in terms of advantages.
>>you're only self-made is you grew up in a cave, made your own clothes from animals that you yourself hunted, and built your business while working 80 hours a week as a [worst-job-here].
Even then someone would say that it was still done from a position of privilege because you had a place to sleep, animals to hunt, and how dare you say you are self made - you at least had a job unlike many people in this fine country!
To me, "self-made" means being able to take the opportunities within the environment that you live in and make the best out of them. Yes, that usually means that you get some opportunities that other people don't get - but equally, there are opportunities that you don't get either. You can be a "self-made" white son of a billionaire. Or a "self-made" immigrant of colour. Alternatively, we can stop using the term "self-made" entirely and pretend that it doesn't exist. That's also a solution.
> devices now used extensively by the film industry.
It's not a big enough industry to support their valuation. Many companies have developed clever equipment for the film industry over the decades[1] and none has been valued at $15bn for it[2]. As an example: Panavision sold for $622M last year.
They really need to (edit: continue to) be selling to consumers. That said, I agree completely about their quality and success.
Yes, DJI literally shocked me when I bought the Mavic. They completely bust the stereotype that China is bad at design and innovation, e.g. "Designed in California, Assembled in China". Everything from the build quality, to the packaging, documentation, software, even customer support has impressed me.
They're like the canary in the coal mine, a wakeup signal for the Silicon Valley that thinks they're still on top because design and innovation happens here, and China is only for lower-on-the-supply chain stuff. If companies like DJI replicate, and China gets a few dozen Samsungs and Sonys, which become global brands and symbols of high quality instead of regional brands, one of the shining sectors of the US will have been caught with its pants down by misjudging their competition yet again.
DJI is going through a rough patch right now via a $150m internal theft scandal. Even if they are catching up on tech pretty quickly, Chinese companies still have a long way to go in catching up with management and business practices.
True, corruption is one of the biggest problems in countries transitioning from developing to developed. Yes, we haven't quite fully cracked that nut either, but I think the issue is one of degree, not kind. There's probably some inflection point, where corruption crosses a 'herd immunity' like threshold, and the entire system gets sick.
MIUI OS seems to be liked by some, personally think it's terrible.
That said, they are one of the few phone companies left that allow consumers to unlock the bootloader, along with offering some stock android models with zero bloatware and monthly security updates.
Samsungs are worthless now if you can't install Lineage on them.
Their pro devices are excellent, though, and support a lot of commercial drone markets from law enforcement, to search and rescue to film to surveying. Why would they not sell those devices?
You are right, I'd say that true "big deal" companies don't "surface" in China.
For example, the near monopolist laptop and phone hinge manufacturer RKX did not have a website up until relatively recently.
The same is true for the biggest slip rings manufacturer in China Jinpat - was virtually unheard of even among engineers in China. Everybody only knew them as the no name slip ring maker, but few knew that they control almost all the market for microminiature slip rings, and high performance ones.
The tech big players in China are actual tech companies, not websites.
The tech can be amazing, but the business itself can still be essentially, a kind of a ponzi scam. The vast majority of people cannot make money from an Antminer S15 unless they're able to steal electricity or get it super cheap. At current predicted hash rates, power consumption, and BTC prices, these miners are a wash, or net negative. (https://www.asicminervalue.com/miners/bitmain/antminer-s15-2...) That makes them a scam. Even if they were profitable, it would likely be temporary, meaning you'd have to buy a whole new suite of even faster HW as soon as everyone else buys them.
That's why I view this as selling pick-axes to unsuspecting and gullible farmers who sold their worldly possessions for the great gold rushes of the 1800s. The people selling the mining equivalent knew the vast majority of them would never earn anything. The best most amazing technologically advanced pick-axes in the world can still be a disrespectful business model.
An Antminer isn't a license to print money. It's a device for hashing blocks.
This is like calling Sony a scam because they sell video cameras to aspiring YouTube stars who never make money out of their aspirations.
It matters, because there are plenty of scams out there, where people exchange money in good faith and receive a substandard good, or nothing at all, in return.
If Bitmain does that, provide evidence. If it doesn't, stop making libelous statements about them.
You may not like their product. I would never buy it. But it isn't a scam.
And what legitimate business or personal need does hashing blocks satisfy? A camera is useful even if you don't use it to produce a Youtube video. The average person buying a camera isn't seeking to make money off of it by photographic profession or vlogging.
However, the vast majority of people purchasing ASIC miners think they're going to make money from them.
Another example: GPUs, some people bought em for mining, but independent of mining they accelerate games and digital content creation, and lots of other useful computation.
Xiaomi is another one, their build quality is good and they make a whole bunch of actually useful non "tech" things like escooters, air filters, vaccuums. I don't know if they're shady with finances or data collection though
Xiaomi doesn't really make air filters and vacuums, they are made by their partners. Xiaomi is providing retail service to those partners. Xiaomi also provides partners other services, like pooling purchases to lower price and pooling loans to lower rate.
One financial analysis of Xiaomi I read (it's in Korean, I couldn't find anything in English) is that it is in part a lending company funded by float from manufacturing partners. Xiaomi has a personal loan product which grew by 100x in two years to ~1 billion. Liquidity comes from delay between retail sale to partner payment.
Nominally, yes... the "street rates" are completely random, and if you manage to qualify for any government endorsement, state banks will be ready to bamboozle any amount money on you.
Yeah but so is Ford (https://qz.com/1262815/fords-move-to-stop-making-cars-was-en...) and GM ($49.5 Billion US govt. bailout), they would have been crushed by the Japanese and European auto companies a long time ago but nobody cares, it's the winners that matter in the world so saying govt. sanctioned is pretty random chance of probability, I wish I was a govt. sanctioned company person in China but that is never gonna happen.
You mean SAIC-GM (51% SAIC, 49% GM JV of course). Buick is considered a decent brand in China.
American brands are more competitive with Japanese brands in China due a fluke: as all of them are made in human labor intensive factories (vs. using more robots), the quality of Japanese designed cars has gone way down to the point that Toyota and Honda aren't thought of as being very good cars like they are in the states.
I often wonder how much of this is because of China's government sponsored espionage and theft. It's a pretty clear pattern of APT hacks and then somehow a Chinese startup is making "huge strides" in advanced metamaterials manufacturing. Then they are subsidized with cheap (basically free) government loans which undercuts the market.
If the Chinese government steals trade secrets for its business and rigs the market in their favor, is that really "self made"?
Perhaps the title should be "party cadres and sons of the politically connected get richer".
Do you truly believe they are the only country on Earth committing corporate espionage?
Everyone is doing it, but in Western democracies you have to hide the fact because voters on all sides frown upon such cheating. Especially stealing from your closest allies who send their troops to die in your pointless wars.
The reality is China doesn't care about getting caught. Just like India shrugs off rescinding billion dollar pharmaceutical patents and starts exporting the generics around the world for huge profits despite never contributing a cent to R&D.
Came here to say that. Compared to making everybody richer, making one guy a billionaire is easy. It costs $1 billion. Even giving each Chinese person $1 would cost more than that.
Edit: Which is not to be all "America Yay!" and "China Boo!" like some high school rivalry. America's legendary wealth inequality objectively demonstrates that it, too, leans closer to "making one guy a billionaire" than it does to "giving everybody a dollar."
Agreed. If you're a regular reader of Bloomberg (I am myself), then you see that they almost fetishize abnormal wealth - constantly writing articles in regards to what the "elite", the "1%", the "ultra-wealthy" think/do. As someone who previously liked Bloomberg (about as much as someone can like that type of thing), the constant obsession with wealth is definitely a turn off.
Bloomberg used to be my go-to news source, but I stopped checking it after they shifted to clickbait spam articles devoid of substance and I realized my time was being wasted.
Spending months outside of Beijing in multiple island cities and seeing the empty buildings and 90% built infrastructure everywhere I don't doubt China will always be poised to userp American dominance, never actually do it, but always close.
just saw a documentary about their international parternship efforts (middle asia, africa and bits of Europe like portugal and greece) .. it seems they might take the lead (unless large economic implosion)
Sure but China inflated its currency, that's a redistribution to asset holders. The acomplishments are admirable all the same, but the accelerated climb is probably boosted by inflation. I predict a correction in next year's list.
It's not really a redistribution to asset holders. These people get about the same in the long run. It's more like the removal of a subsidy on government paper. This promotes private asset creation.
That's a great article! I read about 3/4 and I'll come back for the rest. Your arguement is the ying to my yang.
Where I depart is: wages adjust much more slowly than assets. Wages are negotiated over long spans of time vs. liquid assets. Wage holders think they're negotiating for real value X but it's eroded. Just look at baby boomers. Their wage flows are ~ fixed. Sure many get the benefit of asset appreciation but the ones that don't (get word) are crushed.
The assertion that the gov has the equilibrium interest rate (price of money) set too high is unsubstantiated in the article. We've just been through quantitative easing, so it seems unlikely we're above equilibrium. If only we'd let the market choose!
The natural rate is hard to measure so this is a difficult one to answer. And right now, in the US, my argument probably no longer holds that well (I wrote the post a while back). It looks like the uncertainty surrounding the aftermath of the 2008 crisis finally dissipated and unprecedented government deficit spending has pushed the equilibrium up, making it easier to follow for the Fed. This means there is enough private investment to keep the economy running well and people employed.
Europe and Japan are still very problematic however.
The simple fact that people, businesses and banks hoard cash and government bonds instead of doing sufficient investment to keep people employed is strong evidence to me that the returns on government paper is above market. Excess reserves are high into these parts of the world.
A more widely recognized sign is that they keep undershooting their inflation target.
One thing you can't rely on is the fact that central bank rates are zero in the problematic places. Zero is a high, above market rate when the equilibrium is negative. As I tried to emphasize in my medium post, negative rates can be quite normal and natural. If marginal private assets don't have a positive real rate on a risk adjusted, liquidity adjusted basis, the government shouldn't provide an artificial substitute. If they do, it puts a gridlock in large parts of the economy.
China inflated the value of its currency, they didn't inflate it by printing more (quite the opposite actually). This makes it harder for Chinese companies to do trade, not easier, so I don't see what your point is.
Considering the huge flows into SF, Vancouver and Sydney real estate, that doesn't seem likely. They even institute capital controls to prevent capital flight. That's a sign that the printer is running at a high speed!
If the RMB free floated on the market, it wouldn’t matter how fast they were running the printer since supply and demand would do its thing.
However, if the RMB is overvalued (meaning they say it is worth more than it is actually), then capital controls are very necessary. If the RMB was undervalued, then you would need more controls in the opposite direction (for money coming in) to prevent arbitrage.
Right now the RMB is overvalued, but not by much. Maybe it should be 7 or 7.5 RMB/dollar.
It'd be interesting to be able to compare America and China through the lens of capitalism; at the moment I don't think China is transparent enough to really come up with anything meaningful.
America is a lot less capitalist than it once was [0, 1] total government spending has gone from 10% GDP around the 1930 great depression (so, 9 private dollars for every public dollar) to about 30% post 1950 including State & Local government (2 private dollars per public dollar). I'm not sure how to interpret it, but spending on military also seems to have plummeted since the 60s as a % of spending. The military spending was where the research for things like the internet was done, so that might be meaningful. It seems very reasonable that the impacts of research and tax impacts on savings play out over 20-30 year timeframes (low risk capital investment pays itself back over ~15-20 years which sets up a natural cadence).
As the world becomes competitive for the first time since the end of the cold war, issues of how to generate new wealth very rapidly become important. America won't be able to harvest resources from foreign climes (eg, the Middle East) as freely now that China is starting to move beyond its boarders; to say nothing of potential changes in India or other Asian countries.
I looked at their US websites just now and will say they are certainly worthy of being in the conversation. I have never used either one though in my 20+ years of being a 'netizen'.
I think China may be ahead of the US in AI and space right now, I don't know to be honest. What do you think?
They aren't international brands. Alibaba gets some traction outside of China for those who want to buy cheap Chinese goods, while Tencent has bought some foreign game companies, but otherwise no one outside of China really knows who they are.
This is about my familiarity with them to be honest. Brands I am aware of but haven't given a dollar to. Yet, I end up using Apple, Alphabet, Amazon, Microsoft services/products every day in one way or another. I don't agree with everything each of them does but I support them because I respect them.
Maybe Tencent and Alibaba dont need to focus more outside of China. China in itself is a huge market. Also the reason we dont hear about these services is that HN is largely representative of the English speaking part of the world - a big part indeed but not the whole.
DJI makes impressive drones and handheld cameras, I’d say they are honestly best in class. Anker makes some of the best batteries and tech accessories. They don’t seem to have an Apple or Google yet, but they are getting better. Only a matter of time.
Six of the ten richest people on earth are US tech billionaires.
Out of the 63 technology billionaires in the top 500 global richest that Bloomberg tracks in their billionaires list, 32 are in the US. China has 13.
Here's the breakdown of technology billionaires in the Bloomberg top 500 rich list by country (the list cuts off at $3.7b):
US 32, China 13, Germany 5, Canada 3, India 2, Japan 2, Australia 2, Brazil 1, South Korea 1, France 1, Taiwan 1
(Eduardo Saverin gets listed for Brazil, I'd probably list him for Singapore however)
Over time you realistically can't have a China with an economy the size of the US (the two economies will be larger than $30 trillion each before China reaches parity, assuming they ever do), without them having an enormous amount of tech wealth. The two will likely represent ~45% of the entire global economy in terms of output over the next few decades. In terms of millionaires, it'll be closer to 75% of all millionaires on earth between the two giants (the US by itself as of just a few years ago had about 45% of all millionaires; I assume China has taken a few more points in that time). The last problem the US has right now, is a concern about an upending of its tech wealth creation. Most of China's tech wealth is entirely isolated domestically, the US was never going to be allowed to own that market, and can't own that market going forward. China's tech companies can't own the US market and never will. It's the rest of the globe that is up for grabs, and the US will always win that battle because the rich liberal world trusts China drastically less than the US. So long as China retains its current system (as opposed to resuming the Deng liberalization path), that will remain true. Would I rather use business software from Salesforce (US) or Atlassian (AU) or SAP (Germany), or China? Or nearly any cloud software for that matter. Among the more liberal nations, that remains a very easy decision. China can't compete outside of its borders in most circumstances when data, speech/expression/social/media, privacy, etc. are involved.
Out of the top 100 software companies by sales in the world, the US currently has 73 of them.
Here's a short list of US tech companies which have either been founded or seen most of their growth over the last 10-15 years:
You could add dozens of companies to that list. You could also split off AWS, YouTube, LinkedIn and Instagram as well, as large tech businesses whose growth has soared over the last decade. Netflix was a still small $3b company just ten years ago. Google has also seen the vast majority of its growth since ~2004-2005.
I don't see where there has been a slowdown or upending for the US in the last 10-15 years (which represents most of the China boom phase in terms of their value creation). China's expansion has been heavily isolated to its own territory when it comes to tech companies (Baidu, Tencent, Alibaba, Ctrip, ByteDance, JD.com, Didi Chuxing, et al.), leaving the US free to continue doing what it has been in tech for decades without having to actually compete globally with China in most tech segments. Their tech expansion hasn't come at the expense of the US in other words.
Can someone list the numbers adjusted for inflation? Because these days it seems billions are so common for companies whereas just ten years ago a ten billion dollar company was “super big”. Where did all this wealth come from? Who lost in the zero sum game ?
Wealth is not a zero sum game, but more importantly, valuations are not actual money -- they're just what the company would cost if you bought the whole thing at the same price as the last investment. If a company has a down round, billions may be wiped off the valuation, but actual losses suffered by previous investors are a small fraction of that.
Right but I just meant doesn’t true wealth have to be injected at some point ? Like at some point someone actually needs to mine new resources and inject the resources into the economy ? I don’t really see the last ten years, countries having mined a 100x increase (non inflation adjusted) in raw goods..?
So that leaves the investment. Then others are investing in all these tech companies.. it is a cyclic dependency graph if you trace through the millions of nodes (assuming you get through the offshore accounts which I presume function as sinks). Then ... these companies are getting huge valuations because everyone else is investing more and more into them? Including themselves investing into themselves ?? When does the buck stop? Doesn’t this wealth need to be backed up ultimately by some gold bars ? Even if it’s fiat and fractional reserve .. so someone’s trust rating is ultimately taking a hit? Is the us printing this money out of thin air on the back of it’s huge credit ? I know the economy is too complex to be boiled down like this but where are these 100x increases in billions coming from ultimately? People credit ratings summed over millions of people ?
I never took any Econ courses so admittedly my Econ is terrible.
My problem with this analysis is that it ignores the fact that the China economic phenom was due to rise of manufacturing. Something that happened in the US 50 years ago or so. Computing is essentially the tertiary sector and develops after the secondary sector. So China has only begun approaching that end of the curve. The companies listed here were founded because at that time US was focussed on computing and kowledge had already been acquired. It would be interesting to see what happens as China's tech sector approaches maturity.
Is this a contest where we should be rooting for a side or something? What's the significance of this? Is this some kind of national pride thing where I should be rooting for my home country to win? I'm happy for people that found success for what they've accomplished regardless of where they live. Good for them.
This is a case of the unfortunate omnipotence of titles over discussion. The title frames the topic as a nationalistic opposition; the subtitle does not. Therefore we have replaced the title with the subtitle above.
>Is this some kind of national pride thing where I should be rooting for my home country to win?
What happens if Xi Jinping decides that he wants something that you do not want? He will not let you vote if one day his foreign policy goals involve nice Americans.
Iran was under UN sanctions at the time Meng violated those sanctions. China is on the UN security council, and as a permanent member, they have a veto. They did get a vote, and they voted yes.
Are you somehow not aware of this? They were a founding member of the UN, and have been on the Security Council since it's beginning. They have abstained or voted yes on every UN action that involves the SC (international peace and security).
Meng violated additional US laws... which she is only subject to because she was operating in the US. Just as a US citizen is subject to Chinese laws when operating in China. Surely you're not suggesting that foreigners should be allowed to go into another country and violate their laws without consequence.
Meng is an individual person, which not represent the company or the organization. If US has a war with China, should China legal to kill any US citizen in China?
Right. You are free to trade with Iran, as long as you don't mind disconnecting from the US financial system. Or you try to set up a shell company that does the trades but keeps the parent company from violating the sanctions (to be fair, Chinese companies learned how to do this from American companies).
Technical nihilism is all the rage but... can you really not tell the difference between be the U.S. and China on human rights?
Of course, you could reply to this comment with some gross injustice, and I could counter. But I'm generally curious. And if you do believe that that U.S. and China are the same, I guess my next question, because arguments seem to lead this way - how do you feel about what-aboutism?
They're not the same. For example, it's the U.S. that has the world's largest prison population and the world's most expensive healthcare, etc. China has different issues.
You're right that they have different issues, different problems, different strengths.
But what irks me is the "what-aboutism." If Texas executes handicap people, that's awful. But it makes China harvesting organs OK? The U.S. has a horrible track record in Latin America and (frankly) around the world, so China gets some "slack" in how many human rights activists or lawyers it jails each year?
I understand I'm responding to a larger idea and not your comment specifically but... your exact line of argument is used to justify basically everything China (and Russia, and a lot of people incidentally) does that is condemned by the international community
"So-and-so does it? Wake up you fucking sheep" is basically the locked-and-loaded phrase you can use to sound important and win any argument anytime, anywhere, and I think the tendency to fall back on that idea on HN hurts the community.
It's not good when the USA behaves like that, and it's not good when China behaves like that.
Hopefully, as America's hegemony declines relative to other actors, the resulting multipolar world is fairer for more people.
Monopolies aren't a good thing in the commercial sphere, and they aren't a good thing in the political sphere, both lend themselves to abusive practices by those who can go unchallenged.
This is a great comment - thank you for the contribution.
I sort of go back and forth on the point though. I also think monopolies enable and contribute to abuse - but I worry that the multipolar order would just breed new battle grounds for the various contenders to establish supremacy. On the one hand, you can get the space race (woo, the moon!), on the other hand, you can get the arms race (boo and/or complicated yay, nuclear weapons!).
That's what I'm getting at though - you should throw stones!
China being bad doesn't excuse the U.S, the U.S. being bad doesn't excuse China. But somehow, somewhere, in the rhetoric of HN (and let's face it, the internet) there's this idea that only the morally unimpeachable can criticize something. But in reality that just gives the worst actors carte blanche to do whatever the fuck they want - as long as it doesn't break some record or set a new standard for terribleness.
We're in a moral race to the bottom, and it doesn't help to say "because so-and-so did it." That just digs us deeper
Just be sure that, when throwing stones, you also throw them at the appropriate issues on your own side. Sure, criticize China, and criticize the US, as appropriate. That doesn't mean moral equivalence (they aren't equivalent), but it does mean not sweeping your own issues under the rug.
But without it, you get no household registration as a married couple, which means no birth certificate, which means no household registration and lifelong non-personhood for the child
Where in the world are you getting your ideas? You can't (legally) prevent a child from being registered for a birth certificate even if you want to, as you would expect from the fact that birth certificates are meant to benefit the government, not you. It is literally the first element of Texas HSC §192 ("Birth Records"):
> Sec. 192.001. REGISTRATION REQUIRED. The birth of each child born in this state shall be registered.
Children receive birth certificates regardless of whether their parents are married, or are citizens, or any other consideration. There is no requirement for a marriage certificate, or for anything else.
It's also not true that you can't be registered as a married couple without a marriage certificate. You can, and it's easy.
Edit: You're probably talking about China, not Texas.
And Bitmain? Is it tech wealth creation to sell pick-axes to desperate miners looking for a gold rush? This looks to me like instead, a zero-sum trade, wherein someone got rich, and everyone else was left holding the bag for a device that would be worthless in a few months.
Of all of those on the list, DJI looks like the most legit, self-made success story, producing a very high quality, Apple-like experience in innovative drone devices, devices now used extensively by the film industry.