How China Became A Superpower?

It was in the year 2000 and Bill Clinton was optimistic. Internet, he said, opened to the world.

"There is no doubt that China is trying to dismantle the Internet," he said. "Good luck, it's like trying to nail Jell-O to the wall."

The Internet will inevitably lead China to democracy, he said. How can a country control something flowing while hoping to stay technologically dynamic? Something that should surely give.

He was wrong.

How China Walled Off the Internet

Today, China has the only Internet companies in the world capable of meeting the ambition and scope of the United States.

The United States will have a year in advance to replace paper money with payments by smartphone, turning the giants of technology into essential guards of the consumer economy.

And it is host to a supernova of creative expression, in videos, podcasts, blogs and TV shows, that should dispel any notion of Chinese culture as being conformist.

All this in a patch for the cyberspace protected Facebook and Google, controlled by tens of thousands of censors and subject to strict controls on how data is collected, stored and shared.

Chinese leaders love the internet they created. And now, they want to focus the country's talent and technological capacity on an even more ambitious goal: to build an innovation-based economy, one that produces leading companies around the world.

Not so long ago, Chinese tech companies were better known for copying Silicon Valley.

But the flow of inspiration is now going both ways. US social media executives are turning to Tencent and ByteDance for the latest tips for keeping users on their phones.

Tencent's WeChat app, an all-in-one center for socializing, playing games, paying bills, booking train tickets, has paved the way for increasingly cluttered chat apps created by Facebook and Apple. Recently, Facebook took a page from TikTok, a Chinese service that is making a splash among Western tweens, by launching their own very similar application to create short and ridiculous videos.

If Westerners did not see this coming, it was because they had confused Chinese authoritarianism with hostility to technology.

But in a way, Chinese technology companies are less constrained than American companies. Witness the reaction against Big Data in the United States, calls to break giants like Facebook and anxiety about digital addiction. None of these problems pose big problems for Chinese companies.

In China, there is practically only one rule, and it's simple: do not undermine the state.

Titans like Weibo and Baidu respect the orders of censorship. Unwanted beliefs and ideologies are excluded.

Beyond, everything is fair play. Newly created companies can grow to gigantic size with incredible speed; They can also crash brutally. With weak intellectual property protections, they can be wrong with abandonment, which is not great for rewarding innovation, but O.K. For consumers, who have a lot of options.

And the money continues to flow.

Risk capital invested each quarter. Source: KPMG Enterprise

Another advantage is that old industries like the media, finance and health have been dominated by state giants. This allowed Internet champions such as Alibaba and Tencent to sew these businesses with ease.

With their mobile payment platforms, the two giants built growing ecosystems in which large commercial activities are now taking place. Small remains of everyday life that have not been transformed. Purchasing. Get a loan. Rent a bike. Even go to the doctor.

This level of influence has not gone unnoticed by Chinese leaders. Never in the communist era did private entities exert such influence on people's lives.

For technology to stay in place, the government is demanding business interest and management influence. Regulators reprimanded online platforms for hosting content they found uncomfortable: too obscene, too seductive, too scary or too weird.

That's why the best way to prosper in China for technology companies is to be useful for the state. Almost everyone in China uses WeChat, which makes social networking a great way for authorities to control what people say and do. SenseTime, whose facial recognition technology feeds these fun filters into video applications, also sells software to the police.

The risk for these companies is that the government is asking for more, that it is absorbing resources that could be better used for the search for innovations or entry into new markets.

In China, says Lance Noble of the research company Gavekal Dragonomics, government support "can be a blessing and a curse".