A series of recent headlines has confirmed a looming trend – American tech businesses are giving up China for good. LinkedIn, Yahoo, Airbnb, and most recently, Amazon’s Kindle, have all officially announced their departure.
To me, this trend feels irreversible and not a temporary reaction to the deterioration of bilateral relations between the two superpowers. If and when the US-China relationship does improve, I don’t see any of these companies reviving their China business, because the Chinese tech industry is now quite mature. For every LinkedIn and Airbnb, there are two or three local alternatives with better products and services that cater better to domestic Chinese consumers anyways.
(For more on LinkedIn’s China departure, see our premium content: “Why LinkedIn (Mostly) Left China?”.)
While this trend may be irreversible, if not inevitable, America’s tech presence will not disappear completely. The more interesting question to think about is what parts of “American Tech” will stay in China and why.
There are three reasons why maintaining a China presence is still valuable: the “going overseas” business, software development (or Bits and Bytes), and hardware manufacturing (or Atoms).
The “Going Overseas” Business
Whether you are a Chinese consumer or a Chinese company, the need to “go overseas” is still strong. This need has been distorted in the last two-plus years due to the coronavirus and China’s aggressive “dynamic zero Covid” policy.
Typically, during major Chinese holidays like the May International Labor Day break that is a week long, you would see bus-loads of Chinese tourists around the world. That has not happened this year, last year, or perhaps even next year. But it will happen eventually.
When Chinese people are finally allowed to travel internationally, they will do so aggressively – booking up hotels and Airbnbs in LA, Tokyo, Seoul, Paris, and everywhere in between. But internally, these revenue numbers will be reported as coming from the US, Japan, Korea, and France, even though they are generated from the pockets of the wealthy Chinese upper and middle class. That’s why Airbnb still plans to maintain a Beijing office with hundreds of employees to continue marketing and providing its services.
Beyond the Chinese consumers’ demand, Chinese companies large and small still need services and infrastructures to expand their overseas presence.
AWS and Azure both have sizable operations in China, even though their cloud offerings are less competitive against domestic vendors like AliCloud and Tencent Cloud. Why? Because Chinese companies and even state-owned enterprises, who have (or want to have) a global presence want American clouds as their overseas backends. CCTV 4 wants to use AWS’s cloud infrastructure and content delivery networks to stream its content around the world, just as much as Netflix does.
This demand means maintaining a solid number of sales reps, solutions engineers, and customer services employees. You still have to meet where your customers are, even if that place is inhospitable to your other businesses.
Software Development (Bits and Bytes)
Beyond continuing to make money from China’s “going overseas” business, I suspect most American tech firms will continue to keep and grow their software R&D centers in China. Even though the stock market has not been kind to tech companies anywhere in recent months, and news of layoffs are dropping left and right, acquiring technical talent is still a big need and challenge. China’s own tech crackdown has led to months of layoffs in many sectors, which makes its labor market an attractive place for American companies to hire top-tier talent, especially in one of the hub cities – Beijing, Shanghai, Shenzhen, Hangzhou. This appeal applies to not only tech companies, but even non-tech companies who want to improve their technical capabilities. Case in point, Nike is currently looking for a Director of AI & Machine Learning Engineering…in Shenzhen!
Even though most American tech outfits have left the Chinese market, they have all gone through the trouble of setting up a proper local business entity to hire, issue payrolls, pay taxes, etc. The market may no longer be compelling, but there is no reason to waste the legal entity and not soak up the local software development talent in China, which boasts some of the best engineers in the tech industry.
Shipping the bits and bytes out of China that go into a digital service is relatively easy, even if selling the same service into China is not.
Hardware Manufacturing (Atoms)
The best example of an American tech company planting roots in China in the form of hardware manufacturing is Tesla’s Gigafactory in Shanghai, which not only supplies the domestic Chinese demand for Tesla’s, but also overseas as that factory continues to ramp up its capacity. (For more posts on Tesla’s relationship with China, see our previous post “Tesla, China, the ‘Tech Cold-War’”.) Apple’s reliance on China-based manufacturing is another well-known example. Even though there have been recent reports that Apple is trying to diversify its manufacturing away from China, some to India, some to Vietnam, the cold hard fact is more than 90% of iPhones, iPads, and Macbooks are still manufactured in China right now.
During the early days of the pandemic in 2020, when there was a lot of chatter and discussion around decoupling from China, particularly Apple, I wrote about how difficult it would be for another country, like India, to replicate the cost-quality-efficiency ratio that Chinese manufacturers can offer. China is not the cheapest, but its decades of manufacturing experience afforded the country a lot of leverage and competitive advantage.
Two years ago, the desire to decouple had more to do with geopolitical tension and technology sanctions than Covid. Now the dynamic has shifted, because China’s staunch commitment to “zero Covid” has caused massive and unpredictable disruptions to the global economy and supply chain. These consequences have forced companies like Apple to speed up its pace to diversify its manufacturing sources, even though it would likely have preferred to stay with China for a while longer.
What is uncertain and remains to be seen is whether “dynamic zero Covid” will erode China’s leverage in hardware manufacturing over American tech. What is certain, however, is that even if this leverage does erode, replicating what China has to offer will take a long time. The skills and expertise developed to work with atoms are much harder to transfer than bits and bytes.
American tech may cease to operate in the Chinese market, and for good reasons. But much of American tech will also stay in China for a long time, and also for good reasons.
美国科技离开中国,但什么会留下来?
最近的一系列头条证实了一个迫在眉睫的趋势 – 美国科技公司正在永远放弃中国市场领英、雅虎、Airbnb,以及亚马逊的Kindle,都已正式宣布离开。
对我来说,这种趋势感觉不可逆转。它并不是对两大国之间双边关系恶化的暂时反应。尽管那天中美关系得到改善,我也不认为这些公司中的任何一家会恢复其中国业务,因为中国的科技行业现在已经相当成熟。在每一个领英和Airbnb旁边,都有两三个本地公司,提供更好的产品,更接地气的服务,更能满足国内消费者的需求。
(关于领英离开中国的更多分析,请看我们的付费内容《为什么领英(大部分)离开中国?》)。
虽然这一趋势可能是不可逆转的,甚至是不可避免的,但美国科技在中国的存在不会完全消失。更值得思考的问题是,"美国科技" 的哪些部分将留在中国和为什么会继续留下?
有三个原因证明在中国保持一定的运营和存在仍然是有价值的:"出海"业务,软件开发(或Bits and Bytes),和硬件制造(或Atoms)。
"出海"业务
无论你是一名中国消费者还是一家中国公司,"出海" 的需求仍然强烈。在过去两年多的时间里,由于疫情和 "动态清零" 政策,这种需求被扭曲了。
通常情况下,在中国的重大节日,如五月国际劳动节的一周长假,一般会看到一车车的中国游客到世界各地。这种情况今年没有发生,去年也没有,甚至可能明年也不会发生。但它总有一天会重新开始。
当中国人最终被允许出国旅行时,他们会报复性的去旅游,也就意味着在洛杉矶、东京、首尔、巴黎以及之间所有值得去的地方订酒店和Airbnbs。但在内部,这些收入数字将被报告为来自美国、日本、韩国和法国的营收,尽管它们的来源是中国富裕的中上阶层的钱包。这就是为什么Airbnb仍计划保留一个约有数百名员工的北京办公室,以继续营销和提供服务。
除了中国消费者的需求,中国的大小公司也仍然需要服务和基础设施来扩大其海外业务。
AWS和Azure在中国都有相当规模的业务,尽管它们在国内的云计算产品比不上阿里云和腾讯云等国内厂商。为什么呢?因为拥有(或希望拥有)海外业务的中国公司,甚至是国企,都希望用美国公司的云计算作为其海外后台。央视四台希望使用AWS的基础设施和内容交付网络,在世界各地流传其内容,就像Netflix一样。
这种需求意味着要保持稳定数量的销售、解决方案工程师和客服员工。企业服务生意的原理不变,仍然需要在客户在的地方有人,即使那个地方对你其他业务来说并不友好。
软件开发(Bits and Bytes)
除了继续从中国的 "出海" 业务中赚钱外,我怀疑大多数美国科技公司将继续保持和发展其在中国的软件研发中心。尽管最近几个月股市对任何地方的科技公司都不太友好,裁员的消息也是源源不断,但招聘技术人才仍然是一个很大的需求和挑战。国内的科技行业镇压已经导致许多行业裁员长达数月,这使得其劳动市场对美国科技公司极有吸引力,特别是科技界一线城市 – 北京、上海、深圳、杭州。不仅是纯科技公司被吸引,也包括想提高技术能力的非科技公司。Nike目前正在深圳招聘一名人工智能和机器学习工程总监。
尽管大多数美国科技公司已经离开了中国市场,但它们都经历过了建立本地商业实体的麻烦过程,才可以雇人、发工资、交税等。市场可能不再有吸引力,但没有理由浪费这个实体而不用它来吸收本地的软件开发人才。国内已经有许多工程师是科技行业的佼佼者。
将一款数字化服务中Bits and Bytes “运出” 中国相对容易,即使将同样的服务卖进中国并不容易。
硬件制造(Atoms)
美国科技公司以硬件制造的形式在中国扎根的最好例子就是特斯拉的上海Gigafactory,它不仅供应国内对特斯拉车的需求,而且随着该工厂不断提高产量,也在供应海外需求。(关于特斯拉与中国关系的更多文章,见《互联》之前出版的文章《特斯拉、中国、"科技冷战"》)。苹果对中国制造业的依赖是另一个众所周知的例子。尽管最近有报道称,苹果正试图将其制造业从中国分散出去,有的转移到印度,有的转移到越南,但冷酷的事实是90%以上的iPhone、iPad和MacBook目前仍在中国生产。
在2020年疫情爆发的早期,当时有大量高调舆论关于与中国“脱钩”,尤其像苹果这种公司,针对此话题我写了一篇文章,关于另一个国家,比如印度,要想复制中国制造行业所能提供的成本-质量-效率的“性价比”,会是多么困难。中国不是最便宜的,但其几十年来累计的制造经验为国家提供了大量的杠杆和竞争优势。
两年前,想“脱钩”的期望更多是与地缘政治紧张和科技制裁有关,而大多不是疫情。现在,情况发生了变化,因为中国对 "清零" 的执着已经对国际经济和供应链造成了大规模和不可预测的扰乱。这些后果迫使像苹果这样的公司加快步伐,把其制造来源多元化,尽管它可能更愿意在中国多呆一段时间。
不确定且有待观察的是,"动态清零" 是否会削弱中国在硬件制造方面对美国科技公司的影响力。然而,可以确定的是,即使这种杠杆作用确实被削弱了,复制中国提供的硬件制造能力还是需要很长时间。为处理Atoms而开发的技能和专业知识要比Bits and Bytes更难移交的多。
美国科技可能永远停止在中国市场做生意,而且理由充分。但美国科技的某些部分也可能继续在中国长期停留,而且理由也是充分的。
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