During his most recent visit to the States, Chinese President Xi Jinping reinforced his stance regarding a “secure, stable, and prosperous” cyberspace.
Without saying it outright, Mr. Xi’s comments were a nuanced message to American corporations: He’s not going to relax on China’s tough Internet policies.
Despite commentary from U.S. officials in both the private and public sector, China will maintain its stance on Internet control.
I’m not trying to compare China to North Korea here, but it does seem like Xi’s policies have the potential to significantly damage tech-business relationships between his country and the United States.
Xi met with all the major Silicon Valley players, including Facebook’s Mark Zuckerberg and Apple’s Tim Cook, two corporations with starkly different business experiences in China.
Whereas China’s firewalls and censor policies block most Facebook and Google services, Apple generates more than a quarter of its revenue from Chinese iPhone sales alone.
Internet companies that aren’t blocked from China entirely are forced to submit to intense audits and regulation demands.
And that’s the issue Silicon Valley was trying to convey to Mr. Xi.
Although the rhetoric out of China appears to support Silicon Valley’s endeavors and a spirit of cooperation, the reality falls short.
China remains an almost irresistible location for development and investment, but how long will the country be able to hold Silicon Valley’s attention, especially with other desirable options showing up on the radar?
Enter: Digital India
With a population of more than a billion people who are increasingly becoming smartphone and Internet users, many investors are looking to India as the new growth opportunity.
Unlike China, whose economy is swimming in the gutter, India’s economy is experiencing a period of unprecedented growth. The World Bank expects India’s economy to be the fastest growing through the next five years.
Just a few years ago, we never would have expected it, but since Narendra Modi’s inauguration, India’s economy has expanded almost 8%. (Thank goodness, because we clearly can’t depend on China anymore.)
India also aligns more with the United States’ values towards open Internet and creating an even playing field for American firms and their products and services.
While Facebook is fighting for relevance in China, it’s flourishing in India. There are over 132 million Facebook users in India — second only to the United States.
WhatsApp, a messaging service recently purchased by Facebook, is the number one app downloaded in India.
Number two? Facebook Messenger.
India loves Zuckerberg, and apparently its prime minister does, too.
Narendra Modi could not be more different from Mr. Xi.
During Modi’s recent visit, he expressed a definite desire for India to be a leader in progressing the digital economy. He met with Silicon Valley leaders from Microsoft, Google, and Tesla.
He played with Google’s new contact lenses and even made a point to hang out with Elon Musk’s kids:
Modi’s message was clear: “Help India become an Internet powerhouse.”
And it seems like Silicon Valley is responding.
Facebook is forming Internet.Org, which allows basic versions of the service to operate on slower networks and more basic phones, which are commonplace in India.
Google has committed to an agenda of getting 500 million Indians online by 2017. It’s also launched a new platform to offer more effective Internet content to Hindi-speaking populations — an area of the Internet that is currently lacking.
Microsoft has pledged to bring wireless Internet to thousands of villages across the country.
Qualcomm has promised $150 million to fund Indian tech start-up companies.
Twitter is testing out strategies that will allow Indians with very basic phones to still view tweets and therefore keep up with current news around them. (You can join Modi’s 15 million followers on Twitter here.)
All this is great — but we haven’t touched on the most appealing card India has up its sleeve.
Connecting the Unconnected
This one might surprise you.
The colored areas of the map below show the number of active, connected devices across the planet.
More than half of the world’s population remains disconnected from the digital world.
A quarter of those people reside in India.
India is the world’s second most populous country, with 1.3 billion people. That means 1.3 billion potential device and Internet users.
Analysts expect a drastic increase in activity throughout India’s tech sector. It will be a mutually beneficial relationship that will boost Indian growth while offering tech companies a lucrative source of revenue.
At the same time, we’re seeing some real slowdown in China’s economy.
It leads us to ask, “Is India the new China?”
Although there’s still some debate about that, there is no doubt that India is on the verge of a digital revolution.
That revolution will have real implications not only for Silicon Valley but for the larger global economy as well.
Stay tuned.
{$custom_ptt_jessica_signoff}