In The People’s Money, Chatham House’s Paola Subacchi discusses the internationalization, or relative lack thereof, of the renminbi. The subject can be rather like a room of mirrors if one does not follow developments in international currencies, but for those that do, the book serves as a clear overview of the history and the issues, both in general and those facing Chinese policy-makers in particular.
Google vs. Baidu. Amazon vs. Taobao. Whatsapp vs. WeChat. And, most recently, Uber vs. Didi.
There is clearly a divide between China and the rest of the world when it comes to internet companies. Homegrown Chinese tech firms have fought off American challengers attempting to enter the Chinese market. Chinese firms have tried to expand their presence abroad. Alibaba had the largest IPO in the history of the New York Stock Exchange. Tencent is trying to market WeChat to non-Chinese consumers, and has invested significant stakes in Western video game companies, including an outright purchase of League of Legends’s developer Riot Games.
Jack Ma once described online shopping as a dessert in the United States, but the main course in China. That’s one of a set of key differences between developed-economy e-commerce and that of China, differences that escorted eBay out the Chinese door and kept Amazon as a minor player here, while the Alibaba Group has become the world’s largest retailer, the company with the largest IPO ever (US$25 billion in September 2014, though NTT DoCoMo’s 1998 IPO of $18.1 billion is about the same in current US dollar terms) and the nexus of around two-thirds of all parcels delivered in China. Writing for Harvard’s Working Knowledge in May 2014, Professors William Kirby and F Warren McFarlan assert that Alibaba “has done more for China’s small- and medium-sized enterprises than any government policy, ministry, or bank.”