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The Krypton Temple

China's Surging Tech Start-Up Scene
By Bernhard Zand in Beijing

A decade ago, the tech scene in China was grim. But these days young start-ups are turning heads and attracting investors from overseas. As their products find success abroad, Chinese entrepreneurs are acting locally, but thinking globally.

It's a private party in The Basement, a club in Beijing's Sanlitun nightlife quarter: "We Will Rock You" blares from the speakers as about 100 young Chinese gyrate on the dance floor. The women are wearing glowing red, green and blue headbands. The men are filming them with their iPhones.

The Internet firm 36Kr is throwing the party for customers and employees to bid farewell to the year of the snake. The company's third year, and its most successful, is just coming to an end.

After three more songs, the band takes its first break. Several acts follow, including a fire-eater, a stripper and a can-can dance troupe. And then comes the climax of the Chinese new year's party: the raffle drawing. "Okay, everyone log in to Weixin," the MC says, "and shake your phones: three, two, one, now!"

Weixin, WeChat in English, is the most successful Chinese chat app and everyone in The Basement had it installed on their mobile devices. When the phone is shaken, the app displays a list of everyone nearby within just seconds. Those at the top of the moderator's Weixin list win the raffle: iPhones, paid vacation days, giant-screen televisions. One winner is so ecstatic that, new iPad in hand, he begins breakdancing on stage. Then the band returns for the next set.

Around midnight, welcomed by chants of "Laoban!", the boss (laoban) takes the stage. Liu Chengcheng is a slender young man wearing black, horn-rimmed glasses and a hooded sweatshirt, and looks a bit shy standing in front of so many people. The company that he started has also helped several other Chinese start-ups find their way to success: Twelve of the "30 Under 30" software and hardware companies from China singled out by Forbes were made famous by 36Kr, Liu says.

As a child, Liu was interested in comics, much to the chagrin of his mathematician mother. He particularly liked Superman, who comes from the planet Krypton. Krypton, of course, is a chemical element, a rare gas with the atomic number of 36. Hence the company's name, 36Kr, and the rather odd moniker with which Liu addresses his employees.

Investors Call Him

"Hello Kryptons," Liu says hesitantly into the microphone. "I hope the party has been fun. I'm sorry that some of you didn't win anything. Take a taxi home and keep the receipt. We'll reimburse you."

It is a spontaneous offer. Liu Chengcheng, who calls himself simply CC on the English side of his business cards, can afford to send his employees home in cabs. His website and shared work space have become key meeting places for computer experts from China's capital. His turnover and his staff are both growing; investors call him rather than vice versa.

And there are many of them, some overseas, who have become interested in the Chinese start-up scene. Akio Tanaka, a 43-year-old from Japan, is one of them. He is responsible for the second round of financing for 36Kr; his company, which is based in San Francisco and finances projects in Europe, Brazil and Russia, invested $5 million in Liu's firm.

"When I came to Beijing 10 years ago, China's Internet was so ugly," Tanaka says. "But now, the websites of some Chinese vendors are better than those in America." He said he had just ordered a batch of special batteries from the online shop Taobao and at any time he can use the website's chat function to find out where his package is and when it will arrive. Amazon, he says shaking his head, "still sends me emails."

Tanaka says that Beijing has developed from the "Wild West" he got to know in 2004 to become the most important start-up center outside of the US. "Here are the peole, here is the money, here is a market," he says. It is a realization that the more established online universe also now shares. In July, Yahoo head Marissa Mayer bought the Chinese start-up firm Ztelic, which collects and analyzes data from social networks and last September, Facebook executive Sheryl Sandberg came to Beijing to meet with leading IT officials.

American Internet giants like Microsoft and Oracle likewise operate research centers and incubators here. International venture capital funds like Intel Capital, Sequoia Capital and e.ventures have invested hundreds of millions of dollars in Chinese start-ups.

A Momentous Encounter

The history of the Kryptons begins in Liu's hometown of Yancheng, near Shanghai. When he was still in school, he began programming simple smartphone apps. Later, as a university student in Beijing, he wrote a tech blog in which he discussed new apps and gadgets he had heard and read about.

After four years, Liu Chengcheng transferred to the Chinese Academy of Sciences in the Zhongguancun university quarter of Beijing. The neighborhood, in the northwestern part of the city, is considered to be China's answer to Silicon Valley. Since the 1980s, a biotope has developed here where engineers, programmers and investors can easily find each other.

In Beijing alone, some 200,000 people receive university degrees each year, with the state standing by to help those who want to start companies. Some of the start-ups that got their start in Zhongguancun are now worth billions, such as the computer manufacturer Lenovo, which bought IBM's PC division and purchased the Motorola brand from Google. The search engine Baidu and the cellphone manufacturer Xiaomi are also based here.

By Christmas of 2010, 19 writers were regularly contributing to Liu's blog. It was then that Liu met Wang Xiao, one of the founders of Baidu, at a university alumni party. It turned out to be a momentous encounter: Wang offered to invest 300,000 yuan (€40,000; $54,500) in his blog. "I didn't even know why I needed an investor," Liu says. "What was I supposed to do with the money?" He brought these two questions with him when he returned home for the new year's festivities that year. His mother was ready with a warning: "Only a fool or a fraud would give you so much money. Don't do it," she told him.

He was still thinking about it on his way back to Beijing. He values his parents' advice, but, he says, "my mother didn't even know what Baidu is!" He took the money, discontinued his studies at the university and dove into China's start-up scene with three of his writers, presenting the most original ideas on his website. "In the beginning, we were working like journalists," Liu says. "But the more start-ups we presented on the site, the more investors got in touch with us. They wanted us to bring them all together."

It is a cold, smoggy winter Saturday a few streets north of the Forbidden City. It's no thanks to the climate that Beijing, and not the more consmopolitan Shanghai, attracts the most creative young Chinese. One blogger has called the city "the anti-lifestyle capital, the anti-San Francisco."

'Like a Flashmob'

Liu Chengcheng has long since left his student flat and now lives in a studio apartment. Which is to say, that is where he sleeps. He spends his days here in the Tech Temple, a former factory loft which has been modified into an incubator. It is a bright, modern, open-plan office, a bit like an Apple Store with a huge espresso bar. There are some 280 work stations where young entrepreneurs, talent scouts and investors from China, Europe and the US sit in front of their laptops. Fifty of them work for 36Kr.

One glass door displays the message: "If you have everything under control, you aren't moving fast enough." At a table behind the door sit 10 people who have collected for an "offline salon." Ren Ji, who works for a hotel booking service, would like to write a program which makes it easier to find people offering rooms. Victoria is looking for a platform where her company can market children's toys. The cloud-computing expert Zheng Guangwei wants to establish a database allowing doctors to discuss prescriptions. Everyone presents their ideas and a conversation quickly ensues.

"My plan was to enable such connections on my website," Liu says. "But many entrepreneurs wanted to present their projects at their own conferences." For his first "salon," he rented an Internet café in Zhongguancun, figuring that around 50 people would come. "Two thousand showed up," he says. "It was like a flashmob." He learned his lesson: "Online is fast, but cold. Offline is slow, but warmer." His website 36Kr became an agency for start-up conferences.

Business was good and further investors appeared on the scene, from abroad. The venture capital funds Matrix Partners and e.ventures, both from the US, invested a total of $6.5 million in 36Kr. Meanwhile, the 300,000 yuan that Baidu co-founder Wang once invested had multiplied -- 86 times, as Liu quickly calculated: "His share of 36Kr is currently worth 26,000,000 yuan," he says. The €40,000 initial investment has turned into more than €3 million.

The conditions for foreign investors, however, are not entirely comfortable. It continues to be "very painful" to bring money to China, Akio Tanaka says. The hermetic capital markets force him and other investors to create complicated constructs which generally require a shell company in the Cayman Islands or Virgin Islands. China's strict stock exchange rules have likewise meant that no country currently sends more start-ups to exchanges overseas than China does.

But the outlook is attractive. To be sure, Chinese entrepreneurs began by cloning Western ideas, Tanaka says. But they have been so adept at developing their own products that many of them have found success in other countries as well. Weixin/WeChat, which has been on the market for just three years, already has more than 100 million registered users outside of China. Momentcam, a free app developed in China which transforms photographs into caricatures, was temporarily the best-selling app in the App Store in 18 countries.

'Play Me a Sad Song'

The 1.3 billion Chinese, 84 percent of whom have cell phones and half of whom have mobile Internet access, are among the most active users of e-commerce, social networks and online gaming. As such, it is only a matter of time before they close the gap in the tech industry. The Internet giant Tencent, the parent company of WeChat, has bought into the gaming companies Epic Games and Riot Games. Its competitor Alibaba plans to take on market leader PayPal with its payment platform Alipay. By this summer, Alibaba will likely begin offering its stock on US exchanges; it is estimated that the company is worth $73 billion.

At the same time, China's Internet establishment itself is investing in Chinese start-ups. "When we arrived 10 years ago," says Tanaka, "not many Chinese wanted to do such a thing. Now, local funds are growing like mushrooms after rain. Even the government is buying into select start-ups."

Liu Chengcheng and Akia Tanaka both point out that only 10 out of 100 start-ups "are really successful." But, they agree, given the number of candidates, that is an appealing quota for the future of China's IT sector.

They are both quick to cite examples of successes that they themselves have contributed to. Liu unlocks his iPhone, launches the streaming app Jing.fm and says "I am sad, play me a sad song." Immediately, a heart-rending ballad by the American singer Clay Aiken comes on. The best, though, Liu says, is a taxi search app drivers can use to notify clients as soon as they arrive at their doors to pick them up. The fare is then paid via WeChat.

Tanaka says he isn't worried a bit about 36Kr. The platform, he says, is quickly developing into a kind of LinkedIn for Chinese start-ups where entrepreneurs can find everything they need: an investor, an office, the necessary cloud capacity, professional customer service -- and a lawyer if there is trouble.

Liu Chengcheng, who has just turned 25, is already nostalgic about the time "when I was still young." Over the course of the next year, he anticipates that the numbers of both his clients and employees will double. "And it will be increasingly difficult to find the right people to maintain our standards," he worries. It isn't easy being a businessman.

The time he has available for his private life is also shrinking, with trips to Shanghai, Chengdu, Boston and San Francisco. Still, he says, he did finally manage to find the time to get his driver's license.

What kind of car does he want to buy? "A blue one," he says. What brand? "A BMW, maybe a Lexus. Anything but a Mercedes. Only businesspeople drive those."

Translated from the German by Charles Hawley

URL:
http://www.spiegel.de/international/wor ... 53319.html

Of Course the PLA is Planning for a 'Short, Sharp War'
The “revelation” that China’s military is planning for a quick war with Japan should shock no one.

James-R-Holmes_q
By James R. Holmes

http://thediplomat.com/2014/03/of-cours ... sharp-war/

So Captain Jim Fanell, grand intel wizard for the U.S. Pacific Fleet, made headlines this year — again — at the WEST conference on maritime affairs out in San Diego, California. And again, the headlines come from speaking the plain truth in un-politically-correct language. Captain Fanell opines that China is preparing for a “short, sharp war” with Japan over the Senkaku Islands.

‘Zounds! Who’d've thought military forces prepare for armed conflict in peacetime? Or that they prefer to fight short, sharp wars rather than long, dull ones?

George Washington, call your office. Now parse Jim’s words. (The Naval Diplomat was sitting next to him when he uttered the unutterable, so I get to be familiar.) Enlightened opinion on this side of the Pacific Ocean evidently finds one of two things unfathomable: that Beijing is contemplating war, or that the People’s Liberation Army prefers to avoid a protracted test of arms should one prove unavoidable. Let’s take those possibilities in turn.

First, what else should PLA strategists do than plan for a war to uphold what the political leadership obviously considers an important national interest? I hate to sound sympathetic, as I have no truck with the purposes impelling China’s foreign policy vis-á-vis Japan. But that’s a quarrel with Chinese policy, not Chinese maritime strategy or its executors. Armed services exist to furnish their political masters options in times of trouble. Thinking about the unthinkable — and doing advance legwork should statesmen deem the unthinkable thinkable — is what they do.

Indeed, commanders commit malpractice if they fail at this basic function. Flip matters around and look at them from an American standpoint. It’s naïve to wonder, for instance, “who authorized preparations for war with China?” Well, the framers of the U.S. Constitution presumably didn’t expect the U.S. Army and Navy to be potted plants when they empowered Congress to raise land forces and maintain a navy and vested presidents with the authority to conduct foreign relations. That’s who.

The framers expected, and current officeholders expect, military commanders to gaze through a glass darkly into the future — and to prepare for the most consequential contingencies, the most probable contingencies, or both. Hence U.S. efforts to counter anti-access warfare and other Chinese innovations. It’s hard to improvise such countermeasures on the fly.

It’s also irresponsible for military leaders to game the strategy-making process, foreclosing certain options or pressing others on policymakers. That’s why proclaiming that one course of action is “the” solution to some politico-military dilemma or another is so problematic. If military commanders take a one-size-fits-all approach to complex problems, they hand policymakers a stark choice in wartime: select the only option on the table or do nothing. That amounts to the tool — the military — instructing the repairman — the president or prime minister — how to do his job.

Do Western commentators really believe PLA officials would shirk their duty? One hopes not. Chinese strategists are obliged to get ready for likely and serious contingencies, just as America and its allies prepare. Taking the prospect of war seriously is part of that duty — on both shores of the Pacific.

And second, what about the short, sharp part? This is the interesting part of the debate. In very broad terms, there are two strains in Chinese strategic culture. One favors protracted war, the other prizes quick, decisive victory. We can put Mao Zedong’s face on the former, Sun Tzu’s on the latter. But does China really prefer Maoist methods of protracted war? Does Beijing automatically string out armed conflicts? No. Even for Mao, conventional victory is the ultimate goal, protraction a mere expedient in situations where China starts off as the weaker combatant. There’s little reason to think the Great Helmsman relished the grind of irregular warfare and what-not.

If China starts off as the stronger antagonist, then, why wouldn’t it take the swiftest and surest route to success? Sun Tzu warns that no protracted war ever benefits the state. Such conflicts sap the national treasury and other warmaking resources while leaving the state vulnerable to predatory neighbors — even in victory. That being the case, why not heed Sun Tzu’s wisdom if China is the stronger competitor in the East China Sea? Beijing is doubtless content to win through Sun Tzuian methods if it can.

However execrable a statesman, Mao the war leader counseled sagely against letting strategic doctrinaires, or “chatterers,” dominate debates over strategic and operational questions. He professed a more supple approach contingent on relative strength. In this case, at least, it may be wise to listen to the man brandishing a Little Red Book. If Beijing confronts a united U.S.-Japan alliance, it may incline to the protracted approach. If the alliance shows fissures, suggesting that China can go mano-a-mano with a peer or weaker Japan, then Beijing may indulge its Sun Tzuian proclivities. It may strike suddenly, like a hawk — as the grand master advises.

Splendid little war, anyone?

China Mixing Military Modernization, 'Tailored Coercion'

fonte: http://www.defensenews.com/article/2014 ... -Coercion-



A Chinese J-10 fighter at the Zhuhai Airshow in 2012. China's Air Force has evolved from a homeland defense force to one capable of regional power projection. (Wendell Minnick / Staff)

TAIPEI — China’s military modernization efforts over the past 20 years have been marked by broad efforts, according to an expert, as opposed to focusing on specific services.

“So, we see new naval forces, air forces, ground forces and missile forces,” said Dean Cheng, a China military specialist at the Heritage Foundation.

That level of wide-ranging spending, combined with aggressive regional moves — dubbed “tailored coercion” — is what is putting neighbors on edge, experts say.

In March, China announced it was spending $131 billion, up 12.2 percent from the 2013 budget of $119 billion. This year marks 17 straight years of near-double-digit increases in defense spending.

The Chinese Air Force boasts new fighters, upgraded strike aircraft and new surface-to-air missile systems. The Navy has new surface combatants in serial production, new nuclear and diesel-powered submarines, a refurbished aircraft carrier with new ones under construction, amphibious assault ships, and the expansion of its naval infantry. The Second Artillery Corps has a variety of new missiles, including a new road-mobile intercontinental ballistic missile, the DF-41, capable of carrying several nuclear warheads.

Cheng said other new capabilities include advancements in C4ISR support systems, such as new airborne early warning aircraft, electronic warfare aircraft, additional tankers, new command-and-control systems, unmanned aerial vehicles, and space systems that include small satellites and anti-satellite warfare systems.

“All this is backed by additional training. This is not a military that has simply purchased new equipment for parades,” Cheng said. “Instead, there is reason to think that they have been working hard at being proficient in its employment, including the development of an indigenous doctrine, which exploits the strengths and shields, the weaknesses of the PLA [People’s Liberation Army] with this new equipment, as well as training to that doctrine.

“So, in this light, neighbors are faced with a growing, comprehensive threat,” Cheng said.

Added to this modernization is a strategy dubbed “tailored coercion” in a new report released in March by the Center for a New American Security (CNAS). The paper describes an insidious pattern of “dialing up and dialing down coercive diplomacy” — also referred to as “forceful persuasion” — and blending it with positive engagement, such as trade and investment.

The strategy spans legal, economic and military realms. It is also a strategy that has been “uniquely escalatory and revisionist.” Beijing officials consistently declare that the country’s muscular actions have been necessary responses to external provocations. China blames some combination of the US rebalancing to Asia and subsequent adventurism among US allies who believe that they can test China with Washington at their back, said the report.

The most visible evidence of China’s “tailored coercion” strategy has come from naval and Coast Guard activities in both the East China Sea and South China Sea. China claims the entirety of the South China Sea, an area the size of India, and has used a number of small actions via its Coast Guard to enforce its territorial claims. Employing “constabulary forces in contested areas” with Navy vessels out of sight allows Beijing to assert “administrative jurisdiction and overwhelming other countries’ often-weaker response forces,” the CNAS paper said.

Chinese naval modernization has been ongoing for more than two decades to develop a true blue-water fleet to support China’s strategy of projecting force into the first and second island chains, with a long-term policy of controlling these waters, said Tony Beitinger, vice president of market intelligence for AMI International, a US-based naval analysis firm.

“China’s Navy and paramilitary maritime forces [Coast Guard and other maritime security vessels, including thousands of “patriotic fishing vessels”] are now demonstrating their assertiveness to implement this strategy in the South China Sea and East China Sea as demonstrated in part through its provocative behavior with the Philippines in the Spratly Islands and also with Japan in the Senkakus,” he said.

Air Capabilities

China’s air power capabilities have also gone through an extraordinary evolution since the early 1990s, said Doug Barrie, senior fellow for military aerospace at the International Institute for Strategic Studies in London.

The Air Force has been revamped from one intended for homeland air defense and equipped with obsolete aircraft to a service with a significant number of capable modern combat aircraft, he said. Besides offering a greater air defense force, the Air Force is also moving toward regional power projection, he said.

China already can project air power to about 1,000 miles, said Roger Cliff, an Atlantic Council specialist on China and East Asian air power capabilities.

China’s Sukhoi fighters, such as the Su-27, Su-30 and J-11B, “can fly about that far,” as can the JH-7 fighter-bomber and H-6 medium-range bomber, which can carry anti-ship cruise missiles or land-attack missiles, Cliff said. “I expect the numbers of J-11Bs and JH-7s to increase in coming years. Some assessments of the J-20 stealth fighter suggest that it will be even longer range when it becomes operational.”

Cliff said to go farther than 1,000 miles will require new types of assets. One way of doing it is with aircraft carriers. The refurbished Liaoning aircraft carrier can carry only 20 fixed-wing aircraft. US Nimitz-class carriers can carry 60, “so even two to three carriers like the Liaoning would provide a pretty limited power projection capability.”

Another way would be through aerial refueling. China has only about a dozen small aerial refueling aircraft. None matches the 500 tankers in the US Air Force, and “so far Beijing hasn’t shown much interest in buying more.” Cliff suggests that when the Xian Y-20 strategic airlifter completes development, China might develop an aerial refueling version.

A third way would be with overseas air bases, in which China shows little interest. Beijing’s official policy is that China will never acquire overseas military bases, but policies can change. However, Cliff said it was not clear what countries would even host Chinese combat aircraft. Perhaps Pakistan, but that would only antagonize India. Maybe Cambodia, but that would anger Thailand and Vietnam.

Putting it in perspective, despite China’s enormous progress, Barrie said China’s air power is a “modernization effort that remains a work in progress, with areas of weakness still to be addressed fully.”

So what can the US do about China’s military modernization efforts and an insidious strategy of tailored coercion?

Patrick Cronin, one of the authors of the CNAS report, and senior director of the CNAS Asia-Pacific Security Program, said the US needs to develop, in concert with allies and partners, strategies to counter coercion, preserve a credible and sustainable forward force posture in the region, and build inclusive and strong institutions.

“It should also strengthen the capacity of allies and partners, not only to help defend themselves, but also to help others,” Cronin said. This means expanding intelligence cooperation, defense industrial cooperation and the training and exercising across a range of mission areas. These would include humanitarian assistance and disaster relief, ISR, coastal and air defense, missile defense, and countering Chinese anti-access/area-denial capabilities.

“If we bear in mind our core objectives and vital interests, and preserve our comprehensive power, decision-makers will have the maximum flexibility to forge a roadmap with China that at a minimum prevents unnecessary competition and an escalation of tensions or conflict. The answer to the security dilemma is neither appeasement nor provocation but cooperation through strength.”

Email: wminnick@defensenews.com.

Beijing to the US by train: China outlines plans to connect world by high speed rail network

Fonte: http://www.independent.co.uk/life-style ... 42749.html

Tunnel required would be four times longer than channel tunnel, while a high speed line to London and Berlin is also reportedly in the works

TOMAS JIVANDA Author Biography Friday 09 May 2014

China has outlined its plan to connect the world by high-speed rail, including an underwater link to the US running a total 13,000km.

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The ‘China to Russia plus the United States’ line proposed by the Chinese Academy of Engineering would start in the north east of China, travel up through Siberia, across the Bering Strait to Alaska and down through Canada before reaching the contiguous US, The Beijing Times reports.

Other planned lines - construction of which has reportedly began in China - are a link to London via Paris, Berlin and Moscow, along with a second route to Europe following the silk road to reach as far as Germany via Iran and Turkey. The international legs of the lines are currently under negotiation, the state ran paper said.

A fourth Pan-Asian line, connecting China with Singapore via Vietnam, Cambodia, Thailand and Malaysia, is already under construction. Proposals for lines running from China to Africa are currently being drawn up, the paper added.

The most structurally ambitious of the proposals is the US-China link, which would require around 200km of tunnels to cross the gap between Russia and Alaska - four times the length of the Channel Tunnel. If completed it would become the world’s longest underwater tunnel and take an unprecedented feat of engineering.

“Right now we're already in discussions. Russia has already been thinking about this for many years,” Wang Meng-shu, a railway expert from the Chinese Academy of Engineering said. The train would travel at 220mph with the entire trip taking two days.

Reporting on the plans, the state owned English language paper China Daily claimed that China already has the technology in place as it will be used to connect the country to Taiwan by underwater high-speed train requiring a 150km long tunnel. Details of this project are also yet to be finalised however.