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Care to unfold a bit more what's hilarious? Which metrics from the article are wrong or irrelevant for example? You might disagree with the conclusion, and maybe rightly so, but are you saying the data itself, e.g number of companies funded is false? Or it does not matter and something else could help better understand the situation?
The metrics here are those most relevant to finance, which is not synonymous with innovation. Startups are notorious money sinks that are only invested in due to a promise of monopoly profits later, basically a gamble. They usually fail, and dramatically. Finance is necessary for private capital investment and liquidity but when it grows too large it becomes parasitic and also tries to dictate policy. The real estate bubble that China is now dealing with is a direct result of financialization and an expectation that it would be "too big to fail" and that real estare finance would get bailed out by government.
China is tackling this issue by limiting the impact of finance on its economy, changing its lending terms and what it guarantees, including not bailing out real estate finance. This has the direct effect of making startups and venture capital less common as they simply can't make as much money from pure speculation. They don't have a state-funded safety net for their worst gambles and interest rates are higher.
Overall, this is a good development. China's finance sector absolutely needed to be limited and it is good for the state to take on a greater role in running companies.
Thanks for the in depth clarification and sharing your perspective.
Keeping finance in check is indeed important so I also think it's good.
What about the number of funded startups though and the innovative products they would normally provide customers? Do you believe the measures taken will only weed out bad financiers or will it also have, as a side effect, to bring less products and solutions out? Does it mean research will remain academic but won't necessarily be commercialized or even scaled? If you believe it will still happen, how? Through state or regional funding and if so can you please share such examples that grew for the last 5 years?
I think innovation will happen more through universities and existing large companies. Most research and innovation happens through universities anyways and China is currently having an academia boom.
Companies like Huawei are way up, and domestic consumption is slowly rising.
Research happens through university, absolutely, and selling products at scale through large companies, but that's not innovation. Innovation is bringing new products, that is often the result of research yes, to market. Large companies tends to be innovative by buying startups. If there are no startups coming from research coming from universities to buy, I don't see how large companies, often stuck in the "innovator dilemma", will be able to innovate.
Having seen and done this transition I can tell you that companies do very little for innovation compared to university researchers. Companies are exclusively focused on profit, they don't do the five to ten year moonshot project unless they are already a massive corporation, not a startup, and even then the massive companies want the easiest thing to translate to a product and begin making money. At best they have engineers that make scaling up more practical, and while that is a fun and interesting thing, it is also very straightforward and is something a company has to avoid screwing up, not investing in massively to make it right.
I've seen several companies that did literally nothing except swap a couple things on their production line and call it a day. The only transition from research to industry was an IP agreement and a few meetings.
Large companies are not looking for innovation by buying startups, they are usually looking to secure monopolies. Sometimes they want the product and to work it into their own product offerings. This is often a way to vertically integrate more, not innovate. They bring in-house because they see a competitor emerging and want to hedge their bets or because they see a way to take over a market by just doing the same thing. Sometimes it is just a way to hire some employees that seem pretty competent and thereby deprive your competitors. Large companies operate with a monopoly mindset. This is also why Google kills every project that they declare won't scale into a huge money-maker (they really mean take over a market).
Small companies are often started with the plan of actually making and selling their product long-term but run headfirst into the fact that their industry is dominated by just 3 companies that will gladly do the one-two punch of threatening to bleed you legally with nonsense lawsuits while offering to buy you up. Or, on the flipside, just copying your work and changing it just enough that they know they could bleed you legally even though they have broken IP law. Usually, they would rather just buy you out at less than you are worth but enough to make the VCs happy.
I... agree but isn't then contradicting your previous point that innovation will come from large companies if they only try to secure monopolies rather than genuinely innovate? I don't understand from that perspective who is left to innovate if it's neither research (focusing on publishing, even though having the actual novel insight and verifying that it does work), not the large companies... and startups don't get the funding either. Sorry if you mentioned it but I'm now confused as what is left.