The China Vortex

There has been a strong outpouring of support in China for the victims of the Sichuan earthquake, and I thought it would help just to give those outside China and/or do not read Chinese a picture of what is going on in the online world in China.

Tianya is one of the larger BBS sites in China, and they have created a page where Tianya users and visitors can make cash contributions to support earthquake victims and help the recovery.

Tianya has given visitors five options for making cash contributions:

1. Online payment using Taobao’s online contribution

option

2. Making an offline cash donation using a specially set-up post office account
3. Making an offline cash donation to the Chinese Red Cross using a specially set-up account at ICBC
4. Foreign currency donations are accepted at an account set up by Jet Li’s One Foundation
5. Community members can also donate goods to receiving offices in Chengdu, from where they will be sent on to earthquake victims.

There is a warning to Tianya members that they should be careful about who they donate their money to, as there are fraudulent accounts which have been set up to take donations.

The page further lists corporate donations from Chinese companies for earthquake victims, with amounts listed in Chinese yuan.

Leading gaming site Shanda has also set up a donation page for online gamers. Shanda chairman Timothy Chen Tianqiao donated 1M yuan to earthquake victims, which was matched by online gamers. Shanda then added another 1M yuan, making for a total 3M yuan which, according to an announcement, has already been sent to Sichuan for disbursement.

The9, another US-listed game publisher and distributor, created a simple page to announce their donation of 1M yuan.

Giant Interactive, also listed in the US, has created a page on their Zhengtu site where players can post their best wishes to Sichuan victims. They do not ask for money/goods donations.

Perfect World, a leading online game publisher, went public last year in the US under the PWRD symbol. Their BBS for their online community has not mentioned anything with regard to the earthquake or any drives to make donations to earthquake victims.

Technorati Tags: BBS, China, Chinese, earthquake, gaming, giantinteractive, online, perfectworld, Shanda, sichuan, taobao, the9, tianya

“If I were to wait until the Chinese government said I could do something, I’d never be able to make money.”

This is a line I have heard on many occasions from different Chinese entrepreneurs.

In China, there are many areas which are not strictly illegal, but they’re not legal either. Most of the time, these involve fields which are too new for the government to regulate. Any government is a slow-moving giant; they are not renowned for their quickness and being smart. In this business ecosystem, the advantage lies with the fast-moving entrepreneur who can identify a need and move in quickly.

By the time the government has figured out the industry and begins to regulate it, the major players are already established. This is how the online gaming industry started in China with Shanda, and how Giant Interactive became successful with its pay-for-play online gaming model.

When Americans and Europeans go to China, they go out of their way to make sure that every “i” is dotted and every “t” is crossed in all their legal arrangements with the Chinese government. Each executive is effectively protecting himself from litigation and any bad news from the Chinese government.

This is like going to church and asking the priest if you will get eternal salvation by going to church every Sunday and donating one million dollars every year.

In doing so, they are basically asking for Chinese government regulation. Now, do you think the Chinese government is going to favor a foreign competitor or local Chinese company, even one which pushed the boundaries of government regulation in China?

This is one of the great ironies in China.

It’s a little like being a parent; who do you love more, the loyal son who does everything you say but is not creative and imaginative, or the smart son who sometimes frustrates you by coming home late, but is brimming with all kinds of insights and creative ideas and dates all the smart beautiful girls?

If you asked the Chinese government, or at least watch what they do on the policy level, they like the smart and sometimes naughty son.

Unless he gets too smart for his own good, in which case they smack him down.

Technorati Tags: , americans, China, Chinese, entrepreneurs, europeans, giantinteractive, government, lawyers, legal, litigation, regulation, Shanda

Is there any way at all that 2008 will not be the year of the Chinese Olympics, and by extension, China? Will we be stuck between the rise of China narrative and the sourness to the point of completely puckering up of the US media and to a lesser extent European media re China?

I say yes.

The coverage of China by the major media has been completely unsatisfactory; it has not been informative and has instead driven their own editorial agenda. That old editorial agenda no longer works because it does not reflect the ground reality of China. It does make sense though to take a closer look at China’s development outside of just the tier one cities. Let’s hope that this begins to happen.

In the big picture though, the Chinese Olympics are not the biggest story. There are so many interesting things and opportunities happening on the Internet. I’m surprised that so many people miss them, such as the fall of Facebook even though their numbers continue to increase, and the failure of social networks to monetize their traffic because they have chosen to side with advertisers against their own user base.

Facebook is like a rocket which continues to coast upwards even though its engine has cut off; momentum is carrying it upward. But eventually gravity will win…

We are in the early stages of growth for the Internet, I believe that increasingly new Internet startups will be founded by business people, not technology people. On the PC platform, the technology is mature; it is the business models which aren’t working. Now, the smart technology people are switching their focus to the mobile Internet.

For smart business people who want to disrupt the current business models, 2008 will be a banner year. For more predictions, take a close look at the predictions of Mark Anderson and Fred Wilson. Part of the reason new and viable business models have grown relatively slowly on the Internet is because the business side has been driven by technology people who don’t understand business and how to make deals, and the business people have been thinking too much in terms of the large corporate businesses which are now being disrupted by the Internet.

It is time for a new breed of entrepreneurs who understand technology, and are not behoven to traditional businesses. In China, this has already happened in gaming with Timothy Chen Tianqiao of Shanda and Shi Yuzhu of Giant Interactive. Ironically, it has not happened as quickly in the west.

It’s time to expand the base.

On the web application side, it is getting easier and easier to develop robust applications. Twitter, a very successful social application was developed with Ruby on Rails, a full stack web application framework which was released by 37 Signals, a Chicago-based design firm.

The significance of this is that web applications can now be designed by designers who are more focused on user experience than software engineers who are focused on features (many of which are of dubious value). One thing I have noticed among many Ruby on Rails deployments: narrower focus. Instead of trying to do everything, these applications focus on doing a few tasks very well. Good examples are the online project management tools put out by 37 Signals and which I use to manage my business.

Wouldn’t it be great if these web applications were made available to a Chinese audience?

As for myself, I’m sharing my feeds on Google Reader. You can find them through Google Talk and Gmail by contacting me. You can reach me at paul dot denlinger [at] gmail dot com.

I’d like to see yours too; let’s start sharing in 2008!

Technorati Tags: 37signals, applications, China, facebook, gaming, giantinteractive, google, reader, ruby, rubyonrails, Shanda, social, twitter, web