State Media Xinhua Touts China’s “Four Great New Inventions”

This one’s got the foreign China-watching Twitterocracy in an uproar today: Xinhua, China’s official State press agency, has just posted an article claiming four “great new inventions” for the PRC. These are: dockless bike share, high-speed rail, Alipay, and e-commerce. Let’s examine where each of these register on the truthometer:

1. Dockless Bike Share

Got a point there! We’ve laid this out in our dockless bike share explainer already, but Beijing’s Ofo (the yellow one) was pretty much the first company to do this in the world. “Presently,” Xinhua points out, “there are over 30 bike-sharing companies in China that operate around 10 million bicycles for shared use to individuals in dozens of Chinese cities.” Crazy!

And they’re on the move. Mobike (the orange one, above) just set up shop in London, and Ofo has touched down in Silicon Valley. Both are rumored to expand their US footprint in the near future, and while some Made-in-the-USA startups like San Francisco’s Spin are gearing up to enter the fray, this tech was definitely a Chinese original.

+1 for Xinhua.

2. High-Speed Rail

Hmm. The short answer is no, the long answer is more complicated. The prototype for the modern high-speed rail (HSR) network is Japan’s Shinkansen, which opened its first line in 1964. China’s Ministry of Railways began shopping around for a foreign technology on which to base its own HSR network in 2003, started technology transfer in 2006, and had the first Beijing-Tianjin line operational by 2007, just in time to service the Olympic masses. As of last May, China’s HSR network looked like this:

As with other areas of tech, China’s innovation here is less a question of invention and more a matter of speed and scale. Japan’s Shinkansen network, which has been around for over half a century, now covers 1,717.8 miles; China’s HSR network surpassed 14,000 miles in 2016. China is a much bigger place than Japan, of course, but the sheer scale of investment and building involved in creating China’s HSR network — which didn’t exist a decade ago — is, if not an invention per se, nevertheless a staggering feat of engineering.

If we can all move past the equation of “invention” with “innovation,” we’ll be able to much better understand what’s happening in a country that’s trying to solve problems at a scale of 1.3 billion people

Incidentally, China did recently unveil its first independently designed bullet train, the Fuxing, which will reportedly reach new highs — up to 250 mph, which would cut the current Beijing-Shanghai commute by almost two hours.

I’ll give Xinhua 1/2 a point for this one because I’d really like that commute shortened. Get it done!

3. Alipay

Ok, Xinhua, no need to be a smartass. Alipay is the mobile payment app made by Alibaba, one of China’s biggest internet companies, so yes, it’s a Chinese invention. Mobile pay — not so much. TechCrunch has a nice thumbnail history of the phenomenon as it’s developed in the US:

• 1983: David Chaum, an American cryptographer, starts work on creating digital cash by inventing “the blinding formula, which is an extension of the RSA algorithm still used in the web’s encryption.” This is the beginning of cryptocurrencies.
• 1994: Although this is disputed, some believe that the first online purchase, a pepperoni and mushroom pizza from Pizza Hut, occurs in this year.
• 1998: PayPal is founded.
• 1999: Thanks to Ericsson and Telnor Mobil, mobile phones could be used to purchase movie tickets.
• 2003: 95 million cell phone users worldwide made a purchase via their mobile device.
• 2007: Both the iPhone and the Droid operating system are released.
• 2008: Bitcoin is invented.
• 2011: Google Wallet is released.
• 2014: Apple Pay is launched, followed a year later by Android and Samsung Pay.
• 2020: 90 percent of smartphone users will have made a mobile payment. It’s estimated that by 2017, there will be $60 billion in mobile payment sales.

We can insert Alipay onto that timeline in 2004, and eventually it eclipses all that follows. It surpassed PayPal as the largest mobile payment platform in the world in 2013, and now reportedly has almost half a billion users. Alibaba’s product and that of their primary competitor in the field, Tencent’s WeChat Pay, have transformed how commerce is done in China, both online and off. Personally speaking, I now buy all of my pizzas using one of the two.

No Cash, No Cashiers

Article Jul 28, 2017

Again: it’s a matter of scale and speed, but in this department China’s mobile payment zeitgeist is something new and impressive. Another 1/2 point for Xinhua.

4. E-commerce

Nope. Come on y’all. Have you not heard of eBay? Amazon? Kind of a big deal. How can you even try to hedge this? Oh:

With around 731 million Internet users, China has been the world’s largest and fastest-growing e-commerce market. In 2016, online shopping in China saw a growth rate of 26.2 percent, generating 5.16 trillion yuan (767 billion dollars), according to a report on China’s economic data by the National Bureau of Statistics. […] E-commerce now accounts for 15.5 percent of the total retail sales in the country. Thanks to lower costs and fewer licensing requirements, the bar for individual merchants to open an online shop in China has been set lower than the threshold for opening a physical retail store.

E-commerce has also injected fresh vigor and vitality into the economy of rural China in recent years. In 2016, e-commerce created more than 20 million jobs in rural villages, with over 8.1 million online business owners. Rural buyers also contributed 894 billion yuan (131 billion dollars) to China’s e-commerce sales last year.

There are plenty of arguments to be made for how China has innovated within the field of e-commerce, even if you take anything emitted by China’s National Bureau of Statistics with a large grain of salt. The point about rural supply chain innovation is apt. Jouranlist Christina Larson captured the e-commerce earthquake (and a few less savory internet innovations happening in parallel) in a 2016 article for MIT Technology Review:

China’s new affinity for online shopping has powered the rise of Alibaba (whose gross merchandise volume has grown threefold over the past four years, to about $475 billion) and other giant online retailers, including rival JD.com. These companies have knitted together extensive delivery and courier services that can send sweatpants, jade necklaces, or refrigerators to just about every courtyard home in Beijing’s winding old alleys and each apartment in 30-story high-rises in second-, third-, and fourth-tier markets. In small cities that never had brick-and-mortar luxury shopping malls, the aspiring rich now sport Gucci labels.

Meanwhile, farmers in crumbling stone homes in tiny villages, like Bishan (population 2,800) in southern Anhui province, which I visited in 2014, can now peddle their organic radishes to urban foodies using the same platforms, sometimes charging a hefty premium for veggies grown without pesticides to newly health-conscious Chinese shoppers.

True, one can buy nearly anything on China’s leading e-commerce platforms — I get my hempseed oil from the Taobao store of an elderly woman in the remote mountain wilds of Guangxi, for instance — and Chinese companies will probably surge ahead in fields Amazon can only grasp at, like drone delivery and cashierless convenience stores, but I’m still docking you Xinhua, e-commerce is too big a nut.

Minus half a point.

Final tally: 1.5/4

Not the most egregious fib State media have ever spun!

Playing devil’s advocate, I can understand a desire to counteract the old “China can only imitate, not innovate” chestnut, and indeed, its strides in all four of the above fields are impressive and worth mentioning. If we can all move past the equation of “invention” with “innovation,” we’ll be able to much better understand what’s happening in a country that’s trying to solve problems at a scale of 1.3 billion people, many of whom are still below the poverty line.

Speed and scale matter here, and as some of these items — like dockless share bikes and QR-scan mobile payments — start to creep across the Pacific, the pundits calling bullshit on Xinhua’s bold proclamations today may have to alter their tune.