The Future Still Lies in China

At a time when China has become the focus of concern, Bpifrance is back in business in Beijing after the summer break.  With our partners, we are creating an incubator for 18 French internet start-ups and a 250 ME capital risk fund based in Paris and Shanghai to connect the French tech ecosystem with its Chinese counterpart.

These initiatives spring from the same intuition: the digital economy now englobes the entire economy and for French entrepreneurs in this sector, the Chinese market is as important as the US market. Chinese Internet groups are right behind American groups even though they have yet to begin their internationalisation. Some of them are ahead of US tech, as shown by Tencent, which has developed Wechat, an instant messaging service far richer in applications, especially payment applications, when compared to its US opposite numbers.

 In Beijing, the speed of adoption of new mobile Internat uses is stunning. The penetration of e-commerce, the development of within-the-hour delivery services, the replacement of email by chat, the explosion of services like Chinese Uber, the multiplication of app developers with a global dimension, indicate that something is afoot: the USA will have to share its domination of the Internet with China, not because the Party has decided it, but because Chinese entrepreneurs are among the best in the world in this domain, building excellence against the backdrop of ferocious competition in the domestic market. This market functions differently from San Francisco, New York, Paris or London, as much in the domain of massively multi-player games as that of intelligent cars. Which is why there is no alternative to a local and durable implantation of our enterprises in China. The model that Bpifrance is pursuing  in California (French companies whose engineers are based in France while their heads of sales are located in the US) applies equally to China. A French engineer costs less than his counterpart in Beijing or Shanghai!

 France can become a well of resources for the future generations of the global Internet whose rise is taking place in China. The Franco-Chinese innovation fund will invest capital in these companies.  As of now, I do not think that the drop in the Shanghai Exchange, the relative slowing down of the economy and the devaluation of the Yuan is ushering in a fatal unravelling of the Chinese growth story. China is not the sick man of the world economy but a society that is living out an experiment in thirty tumultuous years instead of the 60 taken by the West. There will be other shocks. They should not hide the reality: that of an economy grown to gigantic proportions and which is much better armed than we think, to accomplish its third industrial revolution.