#355 The Digitization of the China Economy

Summary:


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The digitization of the Chinese economy is now proceeding at an unprecedented pace.  It is based on a broad extension of information technologies that have been originally pioneered in the USA but never before extended in scale and scope.  The purpose of this blog is to outline the current status of the Chinese extensions of Internet related services, as evidence by the number of users.

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Although there is a very large number of computer-based startups, in China the government offers incentives for the new ventures to combine into large scale organizations that become the national “flagships” for extending their impact on the economy.

For the purposes of this blog I will concentrate on the large-scale organizations that offer shared capabilities.  They are Tencent (comparable to Facebook), Alibaba (comparable to Amazon), Baidu and others.

The market capitalization of these firms equals or exceeds the worth of comparable US companies. For instance, the March 1, 2018 market cap of Tencent was $653 billion.  Its social media platform had over 900 million users.