Has China its eye on Silicon Valley’s tech?

China has launched its first direct flight to Silicon Valley (SV) and this significant announcement went almost unnoticed. The new route linking Beijing (China) to San Jose (USA) has been operated five times a week on Hainan Airlines (HA) Boeing 787 since June 15, 2015. “China is pursuing quality economic growth that’s partly driven by the development of the Internet industry. The new route can surely facilitate the industry communication for entrepreneurs from Beijing and SV,” said Mou Weigang, vice-Chairman of HA, in an official communiqué. This decision followed years-long development of ties between the two countries’ entrepreneurs. China Silicon Valley (CSV), a California non-profit corporation established in June 2013, promotes investment and business communication and cooperation between China and the SV. So far, the CSV has sent two delegations of mayors, entrepreneurs and scholars from Silicon Valley visit Chinese cities and companies.

While California’s innovative young entrepreneurs hope greater Chinese investment in start-ups, the US government has welcomed such initiatives with caution. Most recent assessments have shown indeed significant increase in suspected Chinese espionage in the US, particularly in the field of high techs. “US companies in SV and throughout California continues to be vulnerable to coordinated and complex efforts sponsored by foreign governments,” Assistant Attorney General John Carlin warned in May 2015. That’s why older and more experienced entrepreneurs told Cyceon that although China’s development of economic ties with the SV is very positive, they will also have to put some limits someday lest China’s own SV – Zhongguancun Science Parkovertakes the original SV.

According to the Park’s website, more than 600 start-ups have been launched in China’s SV in the last 12 months. Although none of these is likely to become the next Facebook or Apple, the development of the Chinese SV has dramatically accelerated. The most relevant fact is that in the long term, if China’s market shares in the US internet industry inevitably grow, the vice-versa to the benefit of the US is not obvious. “Our free market allows the Chinese to act and develop independently here in the US. This is not the case for US companies in China, not to mention that if it’s easy for a Chinese to learn English, this is a miracle for an American to speak good Chinese,” an SV-based source explained. The other fact that could hamper full-speed development between the two SVs is that too often, China’s counterparts have, at some point, ties with the central government in Beijing, blurring the boundaries between private companies and government interests. In Silicon Valley, the building of ties with China has become both a positive development and a topic of national security.