Last year, China stopped Ant Group’s blockbuster initial public offering. This came as a shock to the world as Ant Group, Alibaba’s fintech arm, was on track to raise $37 billion and its valuation was reportedly nearing more than $300 billion. This episode was perceived as an attempt to rein in the successful entrepreneur, Jack Ma. Prior to this incident, he had committed one of the cardinal sins in modern China, which was to publicly criticise the government’s tech policy for stifling innovation.
A year since, hardly a week goes by without the world hearing of yet another high-profile crackdown on a Chinese tech company. China has foisted sweeping regulations, antitrust and anti-monopoly lawsuits, cyber security probes, and algorithm controls on the entire tech segment, ranging from e-commerce websites, search engines, ride sharing and food delivery apps to e-learning portals. These clampdowns are estimated to have wiped off over $1.5 trillion of value from Chinese tech stocks.
China’s obsessive efforts to ensure that no private entity gains enough data to ever be in a position to even remotely challenge Chinese Communist Party-led state dominance, and that no competing country gains access to the citizen database through any unforeseen means, drive much of this overhaul.
We should not overlook the fact that these efforts are limited only to the consumer tech sector. State support to manufacturing and ‘hard’ tech industries, which are perceived to be of higher value, including 5G/6G, semiconductor chips, artificial intelligence, biotechnologies, batteries, aviation and space tech, has only increased.
We are witnessing a conscious redirection of efforts to areas that would maximise China’s geopolitical and geo-economic gains. It would not be surprising to see more state-owned enterprises like ZTE and state-supported heavyweights like Huawei focus on strategic high technology and attempt to be pioneers in the global market.
These developments could be beneficial for India. The rate of digitisation accelerated during the pandemic in India. Start-ups here raised a record $10.46 billion in the first half of this year alone. India’s tally of unicorns has crossed 60. This trajectory and India’s projected growth will make the country the first destination of the funds fleeing Chinese stocks during these crackdowns. However, mirroring the U.S. start-up ecosystem, India’s emphasis too is on consumer tech, from which China is tactically distancing itself. Not to be forgotten, the U.S. also has a far-reaching system for research and development of strategic technology.
The recently concluded Modi-Biden talks as well as the Quad summit emphasised technological cooperation. The U.S. undoubtedly remains China’s lone rival in the high tech space, and the extent of this partnership will be important for India. U.S. interests will more likely be inclined towards the possibilities of market entry and penetration of its firms. India should strive to move beyond this to complementary collaborations.
Open to partnerships
India should also remain open to partnerships with friendly nations, keeping the enhancement of its internal capacity as the objective. An example would be the ongoing talks with Taiwan to bring in a semiconductor chip manufacturing plant to India. If successful, this could drive next-generation industries, including 5G devices and electric vehicles.
The strides India has made in sectors including biotech and space tech have shown that with the right political will and private participation, India could be self-sufficient and also reach global competitiveness. Similar concerted efforts to develop indigenous manufacturing and hard technology are vital if India is to retain its strategic autonomy and securely reach its stated goal of being among the largest three economies by the later stages of this decade.
Anil K. Antony is a tech entrepreneur, public policy commentator and works on Congress’s digital initiatives. He tweets @anilkanton