Can we just link everything to the internet and call it China's new economy?
Latest mainland strategy needs game-changing products to work, not more fancy new concepts
When I saw that China's No 1 air-conditioner maker Gree had announced plans to make an iPhone-like smartphone, I had mixed feelings about the long-awaited economic transformation of the country. Is this more innovation or a sign of another bubble in the making?
That may be both the upside and downside of China's political and economic system: whenever the top leaders say something, businessmen quickly follow in line with the "make the boss happy" political and business culture.
A number of fund managers began to recommend some listed manufacturers that they believe can quickly team up with technology companies to implement the Internet Plus vision by making smartphones, smart cars and even smart shoes. Just put the adjective "smart" in front of something and you will see stock prices skyrocket.
But we do not need any more fancy new concepts. What we do need are real game-changing products like Apple's iPhone that will transform the landscape.
History always repeats itself. In the late 1990s, some fund managers and analysts may remember the easy money that came from registering an internet domain and linking a traditional business with an online presence. After the dotcom bubble burst, only a few players survived the shake-up. Now with China's Internet Plus strategy, it would be advisable to think twice before getting too excited.
Some say the Chinese economy is already full of bubbles, from consumers' spending on luxury products to soaring property prices.
The country cannot afford an Internet Plus bubble. Nor can the rest of the world.
Investors, think twice before making your bets. For entrepreneurs, ask yourself what are you really good at rather than chasing whatever looks popular.
