The State of China 2023 with Shai Oster

12/12/23 • 62 min

"You will continue to see Western investment continuing to decline. The risk-reward calculations won't change in the next 12 months, as far as I can see. The Chinese economy is not about to take off. What you will see is the beginnings of some people who are willing to take the gamble. They are going to try different ways to exit. You're going to see more people experimenting with domestic IPOs, and onshore IPOs because you can get the money off. For example, if you're investing in LiDAR or approved industries, you can do a joint venture or a WOFE or anything. It'd be a joint venture to be able to try and do some kind of onshore listings. I think by chance will stay in this weird suspended state. I don't think we're going to get a resolution from them. The big question is - how much stimulus will the Chinese government throw at the economy and how far are they willing to go to goose the economy?" - Shai Oster

Fresh out of the studio, Shai Oster, independent consultant and former Asia Bureau Chief from The Information is back for the sixth time with the annual review of what is happening to the China tech ecosystem in 2023. The conversation started with Shai's predictions last year on what happened and what did not happen. From there, we discuss the major themes of the year: the decline and restructuring of venture capital in China, how the 2nd generation CEOs from Shein, Pinduoduo and Bytedance have successfully expanded globally as compared to their predecessors, the October surprise of Huawei's 7nm chip. Last but not least Shai offered his predictions in the road ahead for 2024.

Episode Highlights:

[0:48] Quote of the Day #QOTD by Shai Oster

[1:42] Introduction

[2:20] What has Shai been up to?

[3:18] Experience in Thailand is similar to being in China as compared to Hong Kong

[5:30] What did Shai get right or wrong in 2023

[6:00] Sequoia splits into 3: US & Europe, China and India & Southeast Asia

[12:41] Why Sequoia split out India & Southeast Asia to Peak XV

[15:08] State of Venture Capital in China, the 2023 Edition

[22:38] The restructuring of China’s tech ecosystem and where Alibaba Group is heading

[26:10] Why 2nd generation tech founders in Shein, Pinduoduo and ByteDance did a better job in expanding globally compared to BAT

[33:40] Will TikTok be banned in the US and will it go IPO as well?

[38:30] Investors in public China tech companies in the US have now read the regulatory risk section in their S1 filings.

[41:51] Huawei’s October surprise with their 7nm chip and the US sanctions might have accelerated the Chinese’s chip development and independence.

[45:52] Macroeconomics in China due to the declining real estate market in 2023.

[47:49] Why China is still booming despite the doom and gloom of less foreign-directed investments.

[49:55] Shai’s predictions on China for 2024

[53:46] Chinese entrepreneurs coming to Southeast Asia to start companies.

[55:49] Gaming in China and Tencent’s ability to respond to the Chinese government’s demands is still going on.

[59:10] Closing

Podcast Information: Bernard Leong (@bernardleong, Linkedin) hosts and produces the show. Proper credits for the intro and end music: "Energetic Sports Drive" and the episode is mixed & edited in both video and audio format by G.Thomas Craig (@gthomascraig, LinkedIn).

Episode Highlights:

[0:48] Quote of the Day #QOTD by Shai Oster

[1:42] Introduction

[2:20] What has Shai been up to?

[3:18] Experience in Thailand is similar to being in China as compared to Hong Kong

[5:30] What did Shai get right or wrong in 2023

[6:00] Sequoia splits into 3: US & Europe, China and India & Southeast Asia

[12:41] Why Sequoia split out India & Southeast Asia to Peak XV

[15:08] State of Venture Capital in China, the 2023 Edition

[22:38] The restructuring of China’s tech ecosystem and where Alibaba Group is heading

[26:10] Why 2nd generation tech founders in Shein, Pinduoduo and ByteDance did a better job in expanding globally compared to BAT

[33:40] Will TikTok be banned in the US and will it go IPO as well?

[38:30] Investors in public China tech companies in the US have now read the regulatory risk section in their S1 filings.

[41:51] Huawei’s October surprise with their 7nm chip and the US sanctions might have accelerated the Chinese’s chip development and independence.

[45:52] Macroeconomics in China due to the declining real estate market in 2023.

[47:49] Why China is still booming despite the doom and gloom of less foreign-directed investments.

[49:55] Shai’s predictions on China for 2024

[53:46] Chinese entrepreneurs coming to Southeast Asia to start companies.

[55:49] Gaming in China and Tencent’s ability to respond to the Chinese government’s demands is still going on.

[59:10] Closing

Previous Episode

The State of Generative AI and Crypto in 2023 with Kelly Choo

"Consumer demand will accelerate the need for security, privacy and regulation. Like zero-knowledge (ZK) where you can prove something is true without revealing all information. And of course, security infrastructure, which is very interesting and important at this current moment, even before the next bull market. For example, one of the companies we invested into Ledger, a digital asset hardware wallet. You basically have an app store interface where you can trade, you can stake. We see a lot of adoption of crypto in not just a retail space because of increased awareness, in the media, and new DeFi applications coming up, but also in the adoption of enterprise space. So a lot of these enterprises will be thinking to themselves, okay, in my treasury, not just do I need to hold USD and other currencies, maybe I need to also hold Bitcoins, or something else. DBS Bank, They're now holding some of this Sandbox Land, but where do they hold it? They can't hold it just in a wallet and then they throw it into some cabinet somewhere. They need to have the right, security hardware. So we believe this, will accelerate the adoption of applications like ledger, which is like a hardware wallet, for both retail and enterprise. So we believe that age-old saying of selling shovels during a gold rush is still very true." - Kelly Choo

Fresh out of the studio, Kelly Choo, founding partner from True Global Ventures discusses the state of generative AI and crypto in 2023 and what to look forward in 2024. Kelly started with his take on the recent departure of CZ from Binance and the ouster and return of Sam Altman in Open AI and how this impacts the AI and crypto landscape. From there, he broke down how they are looking at the next wave of generative AI companies specifically in the education, metaverse and legal space and crypto companies from ERC 6551 in non-fungible tokens (NFTs) to zero-knowledge proofs. Last but not least, Kelly defines what success would mean for both AI and crypto in 2024.

Episode Highlights:

[0:50] Quote of the Day #QOTD from Kelly Choo

[1:43] What has Kelly Choo been up to?

[3:19] CZ, Binance, and the Rise of Singaporean CEOs

[4:32] SamAltman OpenAI and Microsoft

[7:30] OpenAI Developer Event

[10:05] The Current State of GenAI

[14:41] What Kind of Business Models are Going to be Proving Successful in the GenAI Space?

[16:48] True Global Ventures and AI Startups

[19:23] Review of 2023 Web3 Megatrends

[28:03] What is ERC6551? AKA Programmable NFT's

[30:44] Web3 Tech We Should be Paying Attention To

[32:36] Impact of AI and Web3 on Gamer User Experience

[35:02] The Saudi Government Gets into Crypto

[38:55] Is the Apple Vision Pro a Game Changer?

[39:31] AR and VR Market Predictions

[41:01] BTC ETF and their Impact

[44:26] Regulatory Changes

[45:39] What Does Great Look Like for Crypto and Web3 in 2024?

[46:38] Closing

Next Episode

The Power of Play and Future of Work with George Kesselman

"Money is a very interesting kind of numerical way of measuring when you're levelling up. So that's where the distinction needs to be very clear. The way that I've positioned it in the book and what the research tells us is that if we force the games on people, it's very bad. But if we look at the games that they naturally play in their free time when they were younger, it's a very good predictor in terms of the type of work that they naturally would gravitate to. So if somebody is amazing and loves playing hours and hours of strategy games, and if we put that person in front of the machine, turning out widgets is going to be a very bad mismatch, and then we need to pay them a lot of money and continue trying to squeeze them to improve that performance. But if somebody is motivated by strategy games, and we give them the kind of problems that are very similar to the type of things that they naturally gravitate to they will be motivated. So we're not creating a new game for them, but we're looking at parallels and helping them to find that intrinsic motivation. And that's something that I think becomes super, super powerful where they then create their own games based on the work that we want them to achieve." - George Kesselman

Fresh out of the studio, George Kesselman joined us to discuss his new book "The Power of Play". He shares the main themes and key takeaways on how games will drive the future of work. We began the conversation with George providing an overview of how work has evolved from a craftsman environment to the industrial age and explained why we need a re-thinking of work using game play. He dived deep into the different personas of gamers in work life and offered what success would mean for his book in redefining the workplace.

Episode Highlights:

[0:44] QOTD

[2:02] Introduction: George Kesselman

[3:31] Inspiration behind “The Power of Play” book

[4:47] How George convinced Wiley of the book deal

[5:41] The intended audience for “The Power of Play”

[6:38] Main Themes & Key Takeaways behind “The Power of Play”

[9:31] Remote Work vs Return to Office

[12:02] The legacy of work 1.0

[17:24] Work 3.0 world

[21:04] Introduction to Gamification and Game Design in Workplace

[26:58] Different Personas in Games and how they map into real-world work