Inside Asia Podcast

Silicon Dragon: China, Tech Race, Jack Ma, Leadership

Rebecca Fannin wrote Silicon Dragon: How China is Winning the Tech Race more than 10 years ago, at a time when both China’s tech companies were on the rise—and the future was unclear. She’s my guest this episode, and her account of those days is fascinating—and not simply a matter of early entry and good luck.

Take the case of Jack Ma. I remember inviting Ma to Singapore in 1998 to join a panel of eCommerce entrepreneurs at a time when the industry was in its infancy. I watched in amazement as he won hearts and minds with his visionary – some, then, might have said outlandish – predictions for our digital future.

Looking back now, what is striking is that, above all else, Jack Ma had a story to tell. It wasn’t everything but it was enough to win investment support from investors like Goldman Sachs, Fidelity, and Softbank.

My guest Rebecca Fannin—who eventually went on to found Silicon Dragon Ventures—gives us her own take Alibaba, but also reminds us that these are different times. Today the room is crowded with Alibaba wannabes and even more crowded with heavy-breathing investors who want a piece of the China tech dream.

Is it too much money chasing too few deals? Why do companies and investors alike continue to undervalue the importance of enlightened and dynamic leadership? Could it be that in an environment where innovation operates at breakneck, dizzying speed, the human dimension - embodied by the charismatic CEO – may prove to be the key determining factor in China’s quest for global tech dominance?

As always, thanks for listening.

 

 

William Overholt: Asia's Miracle Economies and the Question of China's Liberalization

William Overholt and I first met almost thirty years ago, way back in 1991 when I was a cub reporter with the Asian Wall Street Journal in Hong Kong. He was then working in investment banking, though it was already clear then that he would be more than that. Bill is a thinker. Someone with the uncanny ability to draw on history, policy and economic trends to forecast the future.

Today, he is known as Professor Overholt, a Senior Research Fellow at Harvard’s Kennedy School of Government. He’s previously served as Director of the RAND Corporation’s Center for Asia Pacific Policy and is the author of eight books, most recently China’s Crisis of Success.

It was reading that book that made me reach out to him and reconnect after more than 20 years.

In his new book, Overholt argues that that the so-called “miracle economies”—Japan, South Korea, Taiwan, Singapore—arise as a result of certain specific conditions. They start by answering fundamental and pressing economic questions. These are countries where cohesion is born out of crisis. That tends to generate a very different set of priorities than those encountered by America’s Founding Fathers.

But as Bill Overholt sees it, there’s a catch—eventually, he argues, political liberalization must have its day. Without it, the miracle economies cannot make the leap from manufacturing-driven and export-led, to something greater.

Which brings us to China. Are we seeing the move toward political liberalization that history suggests is waiting in the wings? Here’s the big question: If Asia’s Four Dragons are evidence that political liberalization can usher in a new level of economic expansion, must China follow suit?

As always, thanks for listening.  

James Barrat: The Intelligence Explosion - AI and the Coming Cross-over Point

This is not the take on artificial intelligence (AI) that you’re going to find in the popular media or on corporate websites. Most everyone is thrilled about what AI can and might do someday soon. Self-driving cars, remotely controlled delivery vehicles, homes that clean and restock themselves automatically, medical technologies that can predict (and prevent) our every illness—these are the tip of the iceberg, and for the companies that will manufacture and control them, they can’t get here soon enough.

But there is a dark side. My guest this episode is James Barrat, futurist, filmmaker and author of AI: Our Final Invention.

With a title like that, you know the news he brings is not good.

Among other things, James and I talked about the “intelligence explosion”—the point at which a computer is able to replicate itself better than human beings can. That’s not so far in the future, James says, but for some reason its seen by very few as a clear and present danger.  

How far away are we from the intelligence explosion? Ten years? Fifty years? Three quarters of a century? As with all things tech, there’s the prospect of acceleration. And in the case of AI, that means we humans may not be ready. Are we looking at a handover or a takeover?: In these times of rampant corporate competition and geopolitical intrigue, what hope can we have for agreeing on the ground rules for AI development and deployment?

As always, thanks for listening.

Wendy Cutler: US China Trade War

We’ve been talking about the impending US/China trade war now it appears our worse fears are coming true. President Trump has followed through with $250 billion in tariffs impacting over 6,000 China-made products—with, apparently, more to come. China has retaliated with its own set of tariffs. No one can say where this is headed, though we can be certain that it’s consumers—and workers—on both sides of the dispute who are going to take the brunt of it.

To get perspective on what an all-out trade war might look like, we reached out to Wendy Cutler. She served under the Obama administration as Deputy US trade representative and now holds the title of Vice President and Managing Director of the Asia Society Policy Institute. Watching this trade debacle unfold has been particularly painful for Wendy, who spent years developing and negotiating the Trans Pacific Trade Agreement, or TPP. Her perspective on the current situation is essential listening.

Trade accords are complex matters. There’s politics to consider, protectionism, currency adjustments and adherence to literally dozens of ongoing bilateral and multilateral trade agreements.

The Trump administration would have us think differently. There are good deals and bad deals, he tells us, a bad deal being any one that doesn’t favor the US. This is a fundamental misunderstanding of what makes trade work in the first place. Compromise is the name of the game, and for experienced negotiators like Wendy Cutler, it’s a matter of listening and discerning the minutia of what’s doable for all of the parties involved.

China has its own unique set of trade issue, and in this episode we get into some important detail. Pressuring China to make changes is one thing, but refusing to negotiate is another. There are many reasons why applying tariffs then walking away is a bad idea, but here’s the biggest one: China, and the rest of the world for that matter, have other options. And what happens then—when a new TPP is negotiated without the US at the table?

As always, thanks for listening.

 

Singapore Hospital Hack

Most of our listeners will have already heard about the Singapore Hospital Hack. A brief refresher: at some point on the 27th of June, the Singaporean healthcare database was breached in what is being described by the Singaporean government as a “deliberate, targeted, and well-planned” cyberattack.

The health records of at least1.5 million people were compromised, including that of Prime Minister Lee Hsien Loong—whose information seems to have been targeted. Though none of the information was altered the hackers had access to the system for about a week, during which they exflitrated crucial data on outpatient-dispensed medications.

How did this happen? Who’s behind it? To get some perspective on this we turned to two key members of the Inside Asia brain trust.

The first is Mack Banner, who recently retired from four decades of running hospitals in Singapore.

The second is Mikko Niemela, Founder of the Cyber Attack Company Silverskin, President & CEO of the Cyber Threat Intelligence Company Kinkayo and author of Anatomy of a Cyberattack.

We don’t have all of the information yet, not by a long shot. But one thing is certain, and that is that we are going to see more of it in the future. Are you ready?

As always, thanks for listening.

Bill Cornwell: Solving Family-Business Factor in Asia

Third generation family-owned empires are at the epicenter of Asia’s growth story—the foundation upon which many national economies have been built over the past fifty years. But with the advent of global trade, digital technology and fast-paced innovation, these same businesses are finding it hard to keep pace. It takes capital, grit, and perhaps most importantly, world-class talent to go cross-border—a move into markets without the advantage of political connections or cultural familiarity.

To get a perspective on the challenges facing these companies and the strategies that are proving effective, I sat down in Singapore with leadership consultant and executive coach, Bill Cornwell. He’s the founder of Cascade Consulting and Professional Training and also serves as a senior faculty member at the Center for Creative Leadership. He’s been working in Asia for more than 15 years, and been a coach to dozens of family-run businesses around the region.

According to a recent McKinsey study, fewer than 30% of founder or family-run businesses survive past the third generation. That’s to be expected—if you consider the charismatic leadership of the family founders who built commercial empires from practically nothing.

Generational tensions emerge as grandkids decide to opt out or change things up, and when that happens there are two choices: either sell the business or recruit outside talent. But that means moving away from a leadership model based on loyalty in exchange for one driven by performance indicators.

It’s not an easy transition. What do businesses do? Enter private capital. Private equity investors want transparency, financial clarity, and systematic approaches. Making changes to appease investors creates tension and that’s a problem for businesses that have traditionally defined success in terms of generational continuity.

It’s a complex, knotty issue. But there is a way out. As always, thanks for listening.

Timothy Reuter: The Drones are Coming

The drones are coming—though they’re not here just yet. But they’re on their way. The recreational photo-junkies who use them to buzz beaches and mountain resorts are the tip of the iceberg. Probably more like the tip of the tip of the iceberg.

The high-pitched buzz of an overhead drone is either fascinating or irritating. In fact, some locations have banned the use of photo drones altogether, citing safety and privacy concerns. But the question of whether you’re for or against drones is beside the point—the technology that makes drones possible has arrive and sales of both personal and commercial drones are growing at a 30%+ year on year clip with US$11billion in projected sales by 2020. And, yes, the worldwide leader in drone manufacturing with an estimated 70% global market share is China-based Da Jiang Innovations.

Imagine all the things drones can and will do: Amazon and McDonald's are experimenting; security firms are deploying drones; and there are drones to measure the weather and provide rush hour reports. You name it and one day, a drone will likely do it.  That’s a lot for governments—or anyone else—to digest.

To help make sense of it, my guest is Timothy Reuter, Civil Drones Project Head at the World Economic Forum. As listeners know, the Center was established by the World Economic Forum as a kind of “think-tank” or “do-tank.” Its mission involves establishing public/private partnerships, then looking for program and policy initiatives to enhance the likelihood of success.

As always, thanks for listening.

 

 

The Trump-Kim Summit

In this episode we’re looking back at the Kim Jong-un and Donald Trump meet-up in Singapore. It now feels like the distant past. And that’s the point. This news cycle is more like a news cyclone. There was much ado about the meeting of the two corpulent men, but now that the dust has settled, what do we have to show for it?

To get perspective we reached out to two key members of the Inside Asia Network, both of whom have a deep knowledge of the region and who also happen to have been on the ground in Singapore.

We first speak with Steve Okun. He’s Senior Advisor at McClarty Associates and for the last twelve years has served as Governor of the Singapore Chamber of Commerce. He’s a trusted source who happened also to have a ringside seat at the festivities. Was this one of those surrealistic moments that defied logic and protocol, or was it the first small step toward the giant leap of opening North Korea? And what was it like in Singapore when the circus arrived?

Next we talk with Frank Lavin, Founder and Chairman of Export Now and a former US Ambassador to Singapore. Frank is based in Singapore, and, as you might expect, found himself pulled in by CNN and others to comment. I put the same question to him that I put to Steve Okun: Is the Trump/Kim meeting to be seen as a window of opportunity, or further evidence that we are living in the Matrix where perception and reality have parted ways? And, again, what was it like on the ground?

 

Adam Schwarz: Trump, Trade, and Asia

Our guest this episode is Adam Schwarz, founder and CEO of Asia Group Advisors, one of the most astute Asia observers in the business. I wanted to ask him what he’s thinking about Asia trade since the election of Trump and the changing role of the US globally.

In most every discussion of Asia trade since the election of Trump China takes center stage. There’s good reason for that, but it’s important to also maintain a broader perspective. What does Trump mean for the rest of the Asia region, and how do other countries these days see and react to US policies emanating from Washington. At the end of the day, what are the implications for the region as a whole of China waxing and US waning?

By politicizing trade, Trump gives license to his declaration of America First. Bilateral, so he believes, makes America sound stronger; back in control. But in practice, it’s not that easy. And doesn’t always make sense. These are early days this trade melodrama.  We’re at the close of the first act. Perhaps.

On the one side you have an American President prepared to put into practice the policies born of campaign promises tailored to a Republican base: Get tough on China! Save American jobs! It got him elected, but it’s bad economics and could have disastrous consequences. On the side we have an emerging China, determined to exert more influence when it comes to global economic affairs.

The supporting cast—and the mainstream media does have a tendency to forget they exist—is comprised of Asia’s other countries who may find themselves vassal states of a rising Superpower if some semblance of reason is restored to US trade policy.

This story will have its twists and turns, harrowing moments of trial and triumph, moments of suspense and shocking revelations. We’ve seen one already. In early May, Trump made a move to ban sales of U.S. products to Chinese telecommunications company ZTE. A few days later he reversed himself and said that an about-face was part of a wider move to ease the threat of $150 billion worth of tariffs on Chinese imports. Trump’s reasoning…and I quote: “Too many Chinese jobs would be lost.”

What? Chinese jobs? Did we hear this right? It begs the question: Has Trump suddenly grown empathetic to global repercussions of a trade war where any job lost, anywhere is a bad thing? Or, is he laying the ground work for a run at the Chinese Presidency, figuring that if he unseats Xi Jinping, he can control the outcome and make every country great again.

Stay tuned. The plot thickens. Return to your seats. And buckle your seatbelts.

Brewer Stone: China Tech

How concerned should Americans be with Chinese investment in US tech companies?

Over the past few years China-based firms have invested in more than a hundred US-based tech deals. These deals focus on the cutting edge of tech, investing in artificial intelligence, 3d printing, facial recognition and military software. Needless to say, this has some US policy makers nervous. China has already surpassed the United States in next generation tech categories like ecommerce and mobility. Rather than playing catch-up, China is banking on its ability to break through to the next level of tech innovation. This shouldn't come as a surprise, Made in China 2025 is a government sanctioned policy initiative with the goal of keeping China in front as the world's leading manufacturing center. Identifying and acquiring technologies to advance its cause is a central tenet of Made in China 2025.

My guest this episode is Brewer Stone, Partner at Nfluence Partners. Brewer works with emerging technology companies and their venture capital and private equity investors. Brewer points out Chinese investors are making different kinds of investments and assuming new levels of risk to achieve their objectives.