Venture capital, clean tech + more
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Venture Capital and Cleantech: The Wrong Model for Clean Energy Innovation by Gaddy, Sivaram and O’Sullivan – venture capital investment is very inefficient according to this MIT paper. More venture capital related posts here.
Why business in Hong Kong should be worried | The Economist – Hong Kong is trapped like the grips of vice. Its economy is dominated by finance and rent-seeking businesses – Simon Cartledge for Gavekal Dragonomics, a consultancy, because these firms are over-represented in government, “Hong Kong’s single biggest disincentive to risk-taking and entrepreneurship—its high costs, especially for property—cannot be tackled.” That is why the back-to-business message is unlikely to resonate with ordinary Hong Kongers. This is probably why Hong Kong start-ups like DJI moved to Shenzhen to found their businesses. (Frank Wang did a lot of the key work on DJI drones whilst studying at HKUST. And even benefited from a small HKUST grant. But he moved across to Shenzhen to found the business itself in 2006.) Fintech has been a bit of a busted flush. It was the latest in a long line of business ideas like wine trading, the arts and medical tourism as failed niches for Hong Kong. Singapore seems to have been much more successful in business creation and seems to be seeing more venture capital interest. Current sectors in Hong Kong likely to be affected include the legal practices specialising in commercial arbitration. Without trustworthy commercial arbitration in Hong Kong doing business in China looks much less attractive. Singapore is trying to bridge the gap, but I suspect that there might be long term corrosion of Chinese business dealings. Digital companies and foreign banks face big worries. Between the Hong Kong Autonomy Act and the Hong Kong National Security Law – Helping America to enforce sanctions would violate the security law. Not doing so would incur American penalties
The untold story of Stripe, the secretive $20bn startup driving Apple, Amazon and Facebook | WIRED UK – what’s more interesting about Stripe is the brothers reading list
Remarks to the Economic Club of New York – United States Department of State – interesting speech by Mike Pompeo
What It’s Like to Escape the Mindset of a Conspiracy Theorist – Vice – fascinating psychology
Barr warns against corporate America’s China ‘appeasement’ | Financial Times – “You should be alert to how you might be used, and how your efforts on behalf of a foreign company or government could implicate the Foreign Agents Registration Act,” he said, referencing a 1938 law that requires foreign agents to publicly identify themselves – those comments hit US banks, Apple and other US multinationals. Attorney General William P. Barr Delivers Remarks on China Policy at the Gerald R. Ford Presidential Museum | OPA | Department of Justice – the US C-suite executives must be getting very worried about this
The State of Strategy. A view from the Frontline | Noteworthy – The Journal Blog – great read and nails the issues affecting strategy and planning at the moment
Mark Ritson: In a virtual marketplace, only the strongest brands will survive – Companies see better profit margins and an almost unlimited customer base but miss the drastic reduction in barriers to entry. – so brand hyper-competition will ensue and the winner takes all model will extend beyond tech. Expect venture capital money to pour all kinds of weird industry niches as they try to pick category winners
WeChat users in the US say a potential ban of the app would cut them off from friends and family in China | South China Morning Post – Banning it might be a mistake. It would be more worthwhile using WeChat data to investigate Chinese in the US with ‘anti American’ sentiment as it’s easy to surveill in comparison to other platforms. WeChat sends messages in the clear with no encryption at all. You then start using the Espionage Act or the Patriot Act prosecutions
Chinese liquor group Kweichow Moutai tumbles after graft news report | Financial Times – Moutai sales are linked to gifting and lavish consumption and some have linked the share price increase with a corresponding uplift in sales and by implication graft. The damaging bit in the article is that Moutai’s former chairman Yuan Renguo quoted saying in private that sales linked to corruption are “a normal part of business” and that China’s corruption clampdown would not reach far enough to affect the company’s business
Banning junk food from TV an ‘irrelevant symbolic gesture’ that won’t reduce obesity | The Drum – the argument whilst true won’t be believed by regulators. Their rationale would be why would junk food companies advertise if it didn’t work? The distinction of this is junk food brand fighting out with similar brands in its category won’t wash. Secondly, advertising bans worked in the past on tobacco products over time
The party’s grip – Under a new national-security law, Hong Kong is already a changed city | The Economist – you have to wonder about the share run and will the pop of the bubble be blamed on ‘foreign interference’?
Outrage Over China’s Treatment of Hong Kong Galvanizes the West – WSJ – Complaints about China have piled up in Western capitals in recent years, but it took Beijing’s new curbs on Hong Kong’s autonomy to galvanize them around something approaching a common cause. – In many respects its like boiling a frog in reverse, it is likely that China didn’t expect the frog to jump out of the pot, given that the heat had been on so long
Opinion | A Coronavirus Care Package From China – The New York Times – After the Communist takeover in 1949, traditional Chinese medicine was institutionalized. Folk remedies helped fulfill both a tangible need — credentialed doctors were scarce — and an ideological end: That system of knowledge is quintessentially and uniquely Chinese. Today, the Chinese government sees a political opportunity in the continuing emotional appeal of traditional medicine. If Chinese people can embrace an Eastern alternative to Western medicine, they might also be more likely to accept the Communist Party’s governance model and reject liberal democracy
Speaking in Tongues – Chinese Storytellers – such a great essay on the current challenge facing Chinese (and in particular Hong Kongers) writing for foreign audiences: a Chinese storyteller telling stories for an English-speaking audience in a divided world. As a writer who has called Hong Kong, Beijing and New Haven home, I find myself often in the position of what Zadie Smith once called “speaking in tongues”: equivocating between the lens of the insider and the outsider, examining the places I call home with both the “objective,” parachuted gaze of the foreign correspondent, and the emotionally implicated and invested eye of the local storyteller. Increasingly, that has felt impossible
Google considers alternatives to Hong Kong for undersea cable | Financial Times – Hong Kong has – become less critical for not only US cloud providers but also their Chinese rivals, according to Tao Wu, a senior research analyst for Gartner, a tech research firm. “Singapore has become much more important than Hong Kong from a location and population perspective,” Ms Wu said. “Other top cloud providers such as Alibaba Cloud are much more focused on south-east Asia to go global than expanding in Hong Kong.” – this will have a big impact for those property developers who’ve invested in data centres (internet hotels). Hong Kong’s financial position for international trading desks will also be diminished if international telecoms infrastructure starts to divert away from Hong Kong. From a pure connectivity point of view Korea, Singapore and even the Philippines start to look really good