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GOLDMAN SACHS: Chinese tech giants are dominating North America [Copy link] 中文

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Post time 2018-9-10 17:53:53 |Display all floors
This post was edited by UYA at 2018-9-10 18:01


  • Chinese companies outpaced their American counterparts in venture-capital funding for the first time during the second quarter, according to Goldman Sachs.
  • Tech giants and Softbank contributed the most to this milestone.
  • According to Goldman's analysts, Chinese tech giants including Alibaba and Baidu are creating ecosystems with unprecedented influence to develop new technologies and business models.
  • Watch Alibaba, Baidu, Tencent and JD.com trade in real-time.


Chinese companies have outpaced their North American rivals in funding startups for the first time — even as the country's economy shows signs of slowing down.


In the second quarter, China-based companies recorded $30.9 billion of venture-capital investment, higher than North America's $27.2 billion, according to data from Goldman Sachs.


Notably, ANT Financial, the Alibaba affiliate that runs China's largest online-payments platform, raised a $14 billion Series C round, the largest-ever deal in the history of VC funding, Goldman said.


"While corporate venture capital has been a major driver of growth in venture as an asset class globally, nowhere has that been more evident than Asia, where Alibaba, Baidu, JD.com, and Tencent have followed the lead of SoftBank, creating massive ecosystems of venture investments under their umbrellas," said a team of analysts led by Heath Terry in a recent note to clients.


"Nearly every major private company in China has at least one of those five companies as an investor, and the level of influence these ecosystems have in steering the development of new technologies and business models is unprecedented."

Investments from Chinese giants span across areas from fintech to logistics, and are often used to widen their industry footprints. One way they're doing this is by funding competitors in the same industries.


"For instance, Ofo and Mobike (acquired by Meituan-Dianping), which are the top bike sharing brands in China, each received funding from Tencent in the past," Heath said.


"Similarly, Baidu Waimai, an online food delivery business once backed by BATJ, merged with Ele.me which counted Alibaba, JD.com and Tencent among its investors. Ele.me has since then been fully acquired by Alibaba."

Here is a list of some investments made by Alibaba, Baidu and Tencent across verticals.


Heath added that apart from the Chinese tech giants, VC investments flowed in from public funds, including governments, which sought to capitalize on companies' success before they filed for initial public offerings. And as valuations continue to soar in the private markets, more companies are looking to go public earlier than before, Heath said.


The rising momentum in Chinese global VC investing is partly being driven by the government's efforts to reduce its dependence on the manufacturing sector and promote a consumption-driven economy for combating slowing growth, Heath said.


The country's economic slowdown could worsen amid its trade dispute with the US; President Donald Trump threatened to hit China with tariffs on another $267 billion goods on Friday.




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Post time 2018-9-11 05:58:04 |Display all floors
The impact of China's greater envolvement in the world is just starting to be recognized by most world players.

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Post time 2018-9-11 14:01:42 |Display all floors
Mishao Post time: 2018-9-11 05:58
The impact of China's greater envolvement in the world is just starting to be recognized by most wor ...

China recognition will always be an "uphill" effort.
Westerners would rather chop off their arm to give China any credit.

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Post time 2018-9-12 04:22:57 |Display all floors
UYA Post time: 2018-9-11 14:01
China recognition will always be an "uphill" effort.
Westerners would rather chop off their arm to ...

True enough.

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Post time 2018-9-17 17:00:24 |Display all floors
These companies are only considered Chinese when it suits China.

Once you consider that these are capitalist enterprises operating in capitalist markets (in China and abroad), traded and valued in foreign stock exchanges, they stop representing anything Chinese.

If anything, they demonstrate the necessity of said capitalist markets even for socialist countries.

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Post time 2018-9-17 17:51:25 |Display all floors
Jaaja Post time: 2018-9-17 17:00
These companies are only considered Chinese when it suits China.

Once you consider that these are c ...

I'm sure the CPC is well aware of the implications.
Can these "Chinese" companies exit China?
Can't imagine that.
Short term capitalism can do well, if there is a "guiding" force it must answer to.
Such as communism.

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Post time 2018-9-17 20:44:38 |Display all floors
UYA Post time: 2018-9-17 17:51
I'm sure the CPC is well aware of the implications.
Can these "Chinese" companies exit China?
Can' ...
Short term capitalism can do well, if there is a "guiding" force it must answer to.
Such as communism.


There is barely even 30 years of history of that experiment, and China continues to need reforms, both in liberalizing previously centrally planned policies in all fields of society, as well as redefining the very communism for it to survive.

Clearly there is insufficient data to come to any such conclusion that you present.

These succesfull tech giants demonstrate success by answering to capitalist values more than socialist values. They'd do even better if they didn't have to answer to certain CPC  policies at all.

Recent examples in that area include Tencent and other game developers in China freezing their releases worh billions of dollars, just because CPC is rearranging gaming licensing to meet socialist core values.

Globally we have much longer history of success by various nations by capitalism, with varying degrees of socialist constraints.

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