In September last year, we talked about the surge of Chinese investors, entrepreneurs and tech executives  descending into Singapore

The question asked then by many people in the ecosystem was “are they here to stay, and disrupt the Southeast Asian tech ecosystem? “ 

Our assessment to this question, back then, was: 

“It largely hinges on whether (and when) China will open its doors, and the investor sentiment will recover. Our bet is that a significant percentage of them will go back if (and when) that happens – a large single market will never run out of interesting opportunities.

But there might not be enough opportunities for everyone, and some might be genuinely exhausted by the incessant competition in tech in China. If only 2-3% of the top people in this cohort decide to stay in the region, and stay put, meaningful impact can still be felt.” 

Almost half a year has gone past, how are things different now? Well, at least a few factors have changed (or evolved): 

  1. China has solved covid – at an unexpected time but in a very swift and decisive way. As a result, consumption (a key indicator is perhaps the KTV booking rate) has surged back. With the reopening of borders, Chinese tourists have, albeit slowly, come out; 
  2. The uncertainty over the new line up of Communist Party leadership is over – some people initially grumbled about the names in the line up, but many people we know have resorted to the belief that the leader can make sounder decisions when surrounded by aids he could trust
  3. The authorities have been sending conciliatory tones to large tech companies, after 18 months of regulatory actions and crackdowns. This is part of the overall drive to boost confidence of the business community – and people expect more positive policies for the economy after the annual parliament meetings (the ‘Two Sessions”) this month; 
  4. The interest rate has risen significantly, and there is uncertainty about the direction of the US economy in the short term (and potentially more rate hikes). That has a deep impact on investment as well as manufacturing (exports fell by close to 10% YoY in Dec 2022);
  5. The shift of supply chain, or rather, the creation of backup supply chains, is happening.There are teething problems with building the supply chain in the rest of Asia, but some global firms have come around to make solving them a major priority.  Everyone has settled on the belief that, call it ‘cold war’ or not, the strategic struggle between China and the US will probably last for decades
  6. The competition between China’s major tech giants has actually again intensified – Douyin (TikTok’s China version) has launched into food delivery (where Meituan dominates); Pinduoduo’s Temu has really disrupted SHEIN and many other cross border ecommerce players – to name a few examples; 
  7. Amid all these is the launch of ChatGPT and the AI arms race that it has stirred amongst China’s tech giants and large cohort of 7-10 year old AI startups. Suddenly a previously almost moribund sector has revitalised. Baidu’s launch of a chatbot based on its own Large Language Model Ernie this month is widely anticipated; 

As you can see, the world of Chinese tech at the end of Q1 2023 has seen a mixed set of signals – but the familiar catfish effect and the incessant competition continue. All these talks about lying fat now seemed like grumbles when people continued to involute (内卷). 

The involution also continues to spill over. Meituan has started recruiting riders in Hong Kong (which has lifted covid restrictions); and I bumped into CTOs of four Chinese tech companies on a recent Saturday at a Cafe in Singapore’s East Coast – each was on a work meeting with their colleagues about their respective companies’ expansion. 

In fact, the major breakthrough in Generative AI might make this easier. Think about it – when you can accomplish the same tech/product tasks with 1/10 of the previous developer headcount. 

We will launch a report on ChatGPT’s ensuing arms race, and its implications, later this month – stay tuned!

In the meantime, you are welcome to read our book Seeing the unseen: behind Chinese tech giants’ global venturing (available also as an audiobook). 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.