Tsinghua Open Courses | Digital Economy: The Chinese Perspective

okay so um in the next probably 40 minutes or 45 minutes right so I would like to share with you some of

my um main research area okay in the last p p probably two decades my whole academic life okay I was studying this

topic which is digital economy and I would like to uh give you a uh probably

a a a try to give you a systematic view about you know what is the digital economy and specifically you know if you

look at from Chinese perspective what would be the logic behind the digital economy and what's the difference between you know the Chinese perspective

and the global perspective so I would like to emphasize three topics okay first

is how the internet and digital economy okay really transform the Chinese market okay and then what is unique what kind first I call

unique about digital transformation of Chinese market but then actually the third question is it is not really unique in the sense is the logic I would

like to present to you okay behind Chinese digital economy actually can be applied okay to other markets

specifically probably other Emerging Markets okay so that's probably the main message I try to convey to you okay so uh specifically I'm going to like to

talk about what is really digital economy so is digital economy is just a new password right so what's the key

difference between digital economy and information economy or network economy or sometime people called internet economy okay so what's really the

difference uh between them and then I I would like to use

several okay examples of my research so illustrate what's loic okay behind

Chinese uh soal the digital economy in Chinese market so The

Outsiders they failed okay and fail miserably and the the the the easy answer okay from particularly like

Western press would be okay we cannot access Google we cannot access Facebook here that's the re main reason okay so

it seems like the Chinese internet or digital economy sector is a heavily protected Market okay so that's kind of

the easy answer for that okay but then you would think okay I I would you know give you different examples so why eBay

failed to the local market competitors like Alibaba and why probably one of the most successful uh companies nowadays

like Amazon okay Amazon uh public announced in it withdrew from Chinese e-commerce Market in 2018 however Amazon

you know it's AWS Cloud business stayed in Chinese market okay and you know Cloud business

you know it's more regulated right versus like the you can think about e-commerce Market is you know less regulated okay pure market player you

can think about it and then of course you know y DD the local competitors of uber okay uh drove Uber out Market Chinese market and the most recent

example would be this this year okay am BNB right withdraw from Chinese market all this examples okay why what happened

right so that's that's uh that's pretty much uh the message or the the examples I would try to give you so first what is

the digital economy okay since 2016 when uh China hosted uh hjo D in G20 Summit the digital economy becomes the most

important topic for G20 Summit okay and of course every year now we can see you know this year in Indonesia the same thing you know digital economy becomes a

kind of consensus worldwide of course now you know due to covid-19 you know everybody suddenly realized okay digital economy digital transformation become

pretty much the essential part of our life right so that's so what is really the digital economy right what's as I mentioned what's the key difference between digital economy and the

information economy or internet business right so uh in fact I would like to give you a a a really macro view from the

probably thousand years of history of humankind okay so most of our human uh history okay we were in so-call

agricultural economy okay in which labor and land are two type of key production factors okay so that's easy to

understand right so uh you either by you know working for a the land earners okay and the so-called sell your labor right

or you own the land and buy labor so about probably couple hundred years ago the Human Society started to enter

the so-called industrial economy or Industrial Age okay so that actually is uh probably the first great in a great

transformation of our human society okay really so the key difference between the agricultural economy and the industrial economy is

you know the Captor and the technology become two okay new type of

key production factors okay so uh I always try to you know um use kind of like one Milestone year to illustrate

the difference okay quite often the year I would like to uh use is the year

1776 okay so what happened in 1776 right so a lot of very important thing happened of course you know the the the the the the the United States become

independent right so so but actually less well-known example would be in 1776 okay a Scottish Economist named

Adam Smith okay published the wealth of nation right very famous BKE so actually that kind of sickness

I can the signals okay the establishment of capitalism or market economy right so the book was already published actually

so Adam Smith in the the wealth of nation the book okay basically propose this Theory and everybody knows the

Invisible Hand Market as right as a very efficient way to allocate resource but actually you can think about the complete uh theory of Adam Smith would

be usually what Economist call the smithan uh uh economic growth model essentially Adam Smith uh says is you

know the the market integration and expansion led to the division of labor which led to the accumulation of

wealth and the growth of economy okay so so it's kind of the the this is the the logic so

essentially before or in in in the last two to 300 years okay so what Adam Smith

discovered is you know uh because of the you know the geography Discovery okay so and then the Market expansion and uh

cross the Atlantic Oceans okay and as a result okay so the division lab of Labor increases okay and then the the economic

growth okay so capture becomes the key production factor in addition to labor and land and

then pretty much the the same times as Adam Smith published his wealth of nation okay another

Scottish okay great man great Scottish okay whose name is James SW right invented okay so marketable Ste steam

engine marketable okay so so so the the gem SW is not the first uh one to who invented the steam engine we all know

right but then James W basically make steam engine becomes okay marketable okay technology so

which certainly opens the door for the Industrial Revolution right and and the technology becomes another key

production Factor okay but using the the term of okay the digital economy nowadays okay you would say

why steam engine okay becomes okay so-call productivity and engine or the gross

machine in at that time in UK but not in okay the Continental Europe okay in fact you know the steam engine was invented

earlier like in Italy in France in Continental Europe okay but only in the lab okay the steam engine okay did not

becomes the market so-called really the Market power okay so why of course the industrial revolution occurred you know

in UK right now using the so-called internet you know the terms now or digital economy terms I always you can

think about now so why artificial intelligence become such a in know widespread application in countries like

China developed countries right it seems like a quite un intuitive right then people would say oh yeah because Chinese

market provide a great so called context okay in Chinese called Ching context for the technology applications okay but

then you can think about it similarly back then in UK okay so the the the UK provide a great context for

steam engine okay basically to become the Market Force of productivity driver at that

time because you know in UK you know relative to capture labor become expensive okay right and textile

industry is booming and uh because a lot of the cotton okay plant in the uh like North American they ship back in UK and

with Advanced TXI industry in UK right so but they they they need uh abundance of cheap labor to produce a lot of

textile products okay so steam engine because in UK right you have a very high reserve of cheap coal and also you know

the the the Water Resource very uh kind of planty so the steam engine can

basically I burn coal and water okay produce steam to drive is all the taxle

machines right to substitute the relatively expensive labor right so that's kind of thing right

so steam engine would become such a popular technology in other markets at that time like Netherland or France

right so even though they all have great Science and Technology at then so okay so but then you

know only after okay in 1913 a genius entrepreneur arguably in

my mind the greatest entrepreneur okay in Industrial Age Henry Ford okay in vented okay the most efficient way to

produce industrial product of course automobile right so that's Henry Ford is not a greatest probably inventor like

Thomas Edison but Henry Ford is probably the greatest entrepreneur entrepreneur is the one who

invented a creative way to allocate resources right so that's Henry for did okay so so that's probably the story in

the first probably two great chapters in our human society now we are entering the third chapter okay we are so probably

privileged we are so lucky okay so so you know we are kind of the not only witnessing but we are participating or

even we we are driving okay our human society to the third chapter of our okay basically history which is digital

economy okay uh then you might ask me okay is this true are we really entering

a new chapter all right or is just a new session of a second chapter still right so so my theory would be yes we are

right so because data okay becomes so calleded the fifth new key production

factor in addition to labor land capit and Technology okay so if I want to give you a milestone year

okay between the industrial economy and digital economy what year would be what year in your mind would be really

the Milestone okay probably kind of you know signal the opening of the digital

economy okay so my answer would be 207 what happened in the year of 2007 right you you know it's not kind of

too far away right you still remember what happened in 2007 right so financial crisis maybe financial

crisis the 2008 right so that's before the 2000 uh the financial so what happened in 2007 you forgot it easily

uhhuh let let me give you a hint what happened Apple what happened about Apple

iPhone Steve Jobs launched iPhone okay so why iPhone is so unique

actually I would argue iPhone is the product which brought over to the

digital age okay do you think that's okay that Mak sense let me tell you okay

so iPhone okay after iPhone was introduced okay Pro pretty soon okay one or year later at that

time the biggest competitive from iPhone who was it at that time who was the biggest competitive of

iPhone you forgot it noia right noia was driven out of Market by iPhone okay but who can imagine at that time because

noia was the king of the market right everybody would agree noia was the king and Nokia is the perfect product for

cell phone nobody can beat Nokia in fact when when iPhone was launched at that time the chairman of Nokia you know in

the board of in the board of meeting say okay it's a crap okay it's a piece of junk okay the iPhone is a piece of junk

because iPhone cannot you know pass the job test in Nokia's Factory okay that's the chairman said but that piece of junk

okay drove I Nokia out of Market okay in just two years right so what happened so

what happened because noia even though was a great IT company but noia was the

great IT company in the industrial economy okay and

iPhone okay is really probably the first product brought off us into the digital economy what happened what's the key

difference between them so noia remember right in order for noia to meet all of you all of your preference so Nokia

launched several different product lines probably dozen different product lines right for every Niche product niche market very

sophisticated highly customerized everybody love it but why everybody

ditch noia in favor of iPhone in just a very short time why so in contrast okay when Steve Jobs launched

iPhone okay every everybody who bought iPhone have the exactly same iPhone exact same iPhone right but

everybody's iPhone is different right because everybody was downloading

everybody's preferred apps right so so in other words noia okay it's a great IT company now you think about Nokia is

also a digital economy because it's it company no actually it's not right at least at that time Nokia was not so so

noia in essentially think okay you know we produce great hardware for consumers but what happened for iPhone in Steve

Jobs mind okay the software defines everything so app is a software okay even though everybody is using the exactly same iPhone from the

hardware perspective but everybody customerize his or her earn iPhone with

everybody's preferred idiosyncratic apps okay that's the key difference but more importantly now what happened is

you know in the industrial economy age when no care or for when they develop new product they all follow the same path

the the so-call sequential pass is you you basically do the I first then you test the product then you launch the product okay it's a sequential process

but now what happened is for all the internet company for all the app developers okay nobody is using these type of models so if you ask all the

internet companies they all using so-call AB test model okay they just launch the app okay by

analyzing users downloading Behavior data by analyzing users app usage

data even by analyzing users okay the bad review data okay they complain about apps okay then they what

happened is they just keep upgrading their apps in right so whatever so that's now you

have a beta version 1.0 version 1.0 one version Etc right so so what happens why so essentially when you are launching the

product you are doing the R&D and you are doing the product test

together right so you are as a company utiliz Iz in users data okay to

drive your product Innovation right right so that's the pretty much the data in this sense the

data based the based on the social interaction among users and app

developers and iPhone IOS ecosystem okay okay then iPhone and all its app

developers make Innovations so why do you think Apple can become the most valuable company in

the world now right almost $3 trillion dollar stock market value right it's just because at Apple

is just a smartphone maker right certainly not the reason why

Apple okay proudly okay has kind of three trillion almost three trillion dollar market value okay it's exactly because

Apple in my mind is probably the biggest digital economy ecosystem in the world

the most value most valuable asset for apple is it's data right it's data and

that's exactly happened for Elon musk's Tesla right so the Tesla that did did the exactly same thing so that's why

everybody every Tesla user every night when they Park their Tesla in their garage recharging their Tesla they are

uploading all their driving behavior data all their traffic data load Construction or low condition data right to Tesla's

server right and then Tesla will upgrading its autopilot you know driving system right so that's that's exactly

happen for Tesla okay so Tesla is not just a car company Tesla is also a digital economy ecosystem right so uh

let me just give you another example for for all of you who are using iPhone you probably remember okay in last April okay uh

Apple launched a new initiative called app tracking initiative because Apple

says you know we we so care about our users privacy okay so we launched this

new initiative okay so basically all the apps you are using after that new initiative they will pop out and when when you're going to try to

use this app they will remind you okay as a app we are collecting your okay location and your user preference data

okay they ask you ask for your permission right do you agree to you know to do you permit we collect it right so

just this this simple initiative okay has a huge consequences okay for a lot of market

player particularly for the ad industry advertising industry okay you probably remember after Apple launched this

initiative okay Mark Zuckerberg were so angry so angry okay of course now you can see if you if

you read okay last year's or this year's actually you know matter of the Facebook's financial report this new

this new initiative by app okay pretty much made matter lost how much money one

10 billion US dollar okay 10 billion advertising revenues okay because think about all the social medias their main

business is selling targeted advertising right but targeted advertising rely on

users data right so less than 40% of the users agree the app okay to collect

their location datas okay so that's that's why so so you can think about it from this example you can tell apple

is become the rule maker for the digital economy ecosystems right rule maker becomes okay

so now I I think I use this example to illustrate what's really the key behind the digital economy so data okay data is

the key so that's why in 2010 so two of my courses and I wrote a

article to basically uh kind of we argue we are entering this new age okay that time we called phase

transition okay of markets the face transition is a kind of physics term okay it's a kind of the uh the transition between in know like solid

state to liquid state like different states okay so if you look at this colum this is Adam Smith theory right so the

traditional markets so firms produ value customers consume value you have this kind division of labor

right but now what happen if you look at Apple's example in fact users are creating value we are creating value for

iPhones right and iPhone and its app developers are consuming the value right so in other words firms customers and all the

stakeholders are co-creating the values together in the marketplace and the RO of markets is resource allocation and the

value exchange right but now is more importantly is resource integration for Value C creation okay

and then the traditional markets the price is the main coordination mechanism however most of the apps in App Store

are free are free right no price there's no price okay so that doesn't mean doesn't mean price is not important price still

important but for for those apps they don't have price what kind of coordination mechanism okay we argue is

data driven social interactions among users and app developers and iOS

ecosystem right so this is you know we have this interaction social interaction in the market place all the time but

now because of the digital technology our social interaction left so-called

Footprints the footprints are data right so what happened is you know by down downloading

the app by using using by using different functions of app okay the firms can know okay what kind of

preferences consumers have all right by analyzing those data okay the the app developers and apple

can get important insights right so that's kind of the the the theory behind that okay so uh quickly so if you look

at so now for you guys right so uh the data certainly become the key production Factor but data is like crude oil right

uh it's useless if we are not trying to make use good use of it but who going to make good res we argue you know it's

digital Talent digital Talent so a couple years ago so we argue you know uh we propose this concept called digital Talent specifically

to differentiate from so-called it talent because when people think about oh digital economy people think about the the the software coders you know uh

in the Zac outside of campus right or the engineerings right but actually all those it engineerings coders Geeks are

important right equally important are all of you so called you know the professionals with complimentary skills

okay so who are they because we are entering this kind of value chain digital transformation age now the whole

value chain now is going through the digital transformation so we categorize all the digital all the value chains into six categories the first category

called the digital Strategic Management specifically the digital transformation leaders and so so like uh the country is the state leaders like in

China why you see the our presidency is so Keen okay on digital economy okay he's actually an expert on

digital economy he propose okay like uh he's really the the front runner and also certainly uh the digital transformation leader of digital China

right so uh and for all the organizations certainly you know the the number one leaders is really the digital transformation leaders then the Deep

analytics right AI business intelligence data scientist then the product IND and advanced manufacturing digital operation and digital marketing okay so those six

six categories so we worked with LinkedIn we all know LinkedIn probably most of you are on LinkedIn right so we worked with LinkedIn to analyze okay how

many okay digital talents what in China and what is what is really the distribution of digital talents across China okay so

uh we analyze 36 million LinkedIn users okay every year in the last five years okay

so this those are the top 15 cities in China okay certainly not surprisingly like B like Beijing

Shai right they are the top 10 but then you know CH is number six okay W number

nine Shia number 10 right for those of you from uh coming from outside China right when now I talk about Chu okay the

first thing pop out in your mind might be CH okay Panda right or part but the

probably nobody would believe chendu actually is in the top 10 digital Talent cities in China okay so Chu the

so-called traditional Midwestern okay less developed Chinese

cities okay actually are one of the Front Runners in the digital economy Battlefield Okay so I strongly encourage

you to go there okay certainly yes could distribution of this based on what

do you categorize the C based on us the total number of users the total number of digital talent in our data yes based

on the LinkedIn users yes yes yeah and then also if you look at the industry distributions across different

Industries in fact more than half of the digital talents are from so-called traditional Industries or non ICT

Industries in China okay so that tells you okay both from Geographic and Industry distribution

perspective okay you know China is really in soall in the Deep digital transformation State okay so

that's that's kind of one message I want to uh uh share with you then okay in the last three years okay so we work with

LinkedIn globally we analyze 40 million LinkedIn okay uh users so called digital talents users

across 301 cities in all different parts of the world okay and if if you go to uh our uh research Center's website okay

it's a center for internet development and governance at sinm okay we actually list all the data in the website so uh we can I share with you

some kind of main insights based on our reports so if you look at this 31 cities okay and most of the Chinese cities actually in this side essentially they

are higher okay probably in basically most of the digital talents in Chinese cities are actually in so-called ICT Industries

in contest most of the uh let's say Western countries okay North American and European cities most of their digital talents are actually in the

traditional so non ICT industry and then those are the we list the six Industries okay the top 10 cities in this six

Industries okay in the worldwide okay and we found out very interestingly uh for instance European cities most of the top 10 cities are

European cities in the corporate service sector okay B2B sectors then in the consumer goods and Manufacturing sectors

and Chinese cities are are are pretty much dominant okay and then the software and the hardware so basically China and

the North American are doing well right so so and those probably the first message I try to give you the second

message I try to share with you is so what is the logic behind Chinese market the digital economy in Chinese market the first let me share with you this cover

page of Economist magazine right so this is the cover page of the first issue of economist magazine last year okay and

the cover page story is the future of econ Economist eCommerce is with Chinese characteristics okay so the story

essentially is you know the the all the Ecommerce players worldwide should in their in

their story their messages should learn from Chinese players okay okay in fact it's the Chinese e-commerce players are

leading the industry Trend okay so and and of course they talk about you know uh how Amazon and Facebook are launching

you know the live stream uh Services Etc okay so uh uh uh so now in in probably a couple years ago you all probably heard

about this term called C2C uh okay it's copy to China model right C2C model but now you know and

then uh several years ago actually I think it's from New York Times okay they coined a new term called KFC okay it's copy from China model okay so it's in

the internet sector okay so like at that time they talk about 10cent WeChat okay now you have like live stream Tik Tok

Etc so uh this is the uh the main message I want to share with you so why you think about the e-commerce Market in

Chinese uh uh uh Market is worthwh to look at it okay so uh in 2020 okay I wrote at piece for uh United

Nation uh uh conference on trade and development to uh basically introduce what's the logic behind Chinese digital economy so in that piece actually based

on my uh all years of my earn research basically I say you know why most of the Silicon company Silicon Valley company

come to China okay they are they were not very successful why because the market condition for Chinese market and

also pretty much for all Emerging Market is quite different from Silicon value why so the marketing environment for digital economy in Emerging Markets like

China okay essentially we are going through the called simultaneous processes between digitalization and industrialization and even urbanization

and agricultural modernization okay but if you think about in Silicon Valley or in back back

in the Western countries okay so digitalization okay

arrived sequential or after you know the industrialization urbanization and agriculture

modernization were finished or completed right so that's so that's kind of so so in emerging markets in like China okay

it's very complicated okay in some parts of the market okay we are in the tier one city seems like industrialization is is almost completed but then in most of

other markets okay we are still in the process of industrialization so what happened is as a result okay as a result

so in China or or most Emerging Market okay so as Internet company or digital economy sector you have to deal with all

the market pain point from those industrialization processes so one of the most important paino is lack of

physical infrastructure and Trust okay so the I think the main successful Factor behind China's digital economy is I propose it first is the forward

looking digital infrastructure development policies by Chinese government like you know pretty much in all the rural villages in China okay we

have access not only on 3G but 4G right that's why like last year I went to guo province okay the governor of the guo

province told me okay 99% of the village in guo can access some access 4G so that's why you know in the

covid-19 okay after covid-19 even a very remote Village in guo okay the the farmers they can go on live stream okay

that's hard to believe even in MO in a lot of developed countries okay so this is so this this digital infrastructure

policy successfully translate China's huge population and Market into this massive data resources right data

resources and then also the Chinese government adopt this inclusive and prudent regulation policy to encourage entrepreneurship so that's why you see

in China a lot of new entrepreneurs like Alibaba R this company Alibaba or JD we talk about they really kind of

experimented and by experimentation to successfully explore okay the business models digital business models for the

Chinese market okay I I will talk talk about in a second so let let me US quickly talk about this due to time Li limitation let me quickly talk about

this case this tall versus eBay case right so in fact in China china

ebay was a early market player than local companies like Alibaba so in 99 each net

okay Chinese online auction uh website was set up by three Chinese har business school NBA graduate they B they basically learned EBAs case on the

classroom and they cop Cat when they come back to China okay so three years later eBay and China by investing in each net okay and at that time each each

net was pretty much a monopoly and then in 2003 eBay acquired the whole company and becomes the company become eBay each

net the same year okay purely out of defensive strategy okay Alibaba at that time is just a purely B2B company you think about it's online Yellow Page

company okay so Ali to defend its B2B Market set up too it's

which is a C2C platform why because jaar the founder of Alibaba believe in China the difference or the boundary between B and the C is quite buring so now eBay is

entering the C2C Market in China so it will encroach the B2B market for Alibaba right so but three years

later eBay was driven out of Market in China okay so what happened okay later on you know Tau and and the b2c version

of Teo was uh set up so what happened what happened is I would say the most important thing for e-commerce in China is not about e it's about

Commerce so what is about Commerce okay the most important thing for Commerce is what is trust for sellers and buyers to

make a deal they need to have a trust or in economics term called information asymmetry has to be resolved right so but what happened at that time back 20

years ago in China okay all of you in China Republican remember at that time okay a lot of fake products in the local

market right so not not to mention now you set up a website certainly you know a lot of fake product okay so so so

that's the lack of trust in China is most important thing so what happened is Alibaba at that time proposed three

kiding applications to address the trust to beat eBay okay the first is R pay okay what is r pay so R pay actually

is not just another type of payment okay but in fact you think about eBay's PayPal is much bigger at that time so

alibaba's alip actually is a ascl account okay what happened is to third party s account so what happened when as a buyer if you bought something from a

seller when you submitted a payment the money will sit on the escow account okay once you receive the product you can check the product whether the product is

fake or authentic then you can ask adpay to release the money if the product is au so you can basically by this way you

know the the the platform can help the sellers and buyers to resolve their settlement risk and also the R11 instant message can help to to kind of the

resolve the trust so for all of you are using tall you can probably remember in the toall the i11 message there is a

famous kind of uh a term called you know Ching right in English is deer right Ching in all sweee right basically make

you become kind of like a builder trust among strangers right to chat with each other but then you might ask why eBay is not using this type of message service

because eBay is using this commission based business model for any commission based business model they cannot allow buyers okay to talk to sellers directly

otherwise they will bypass you know the is kind of uh the platform right so so so basically and toall what happened is

the business model is commission free then you might ask how too make money essentially too is selling advertising

okay the make monies okay so that's that's the key uh message I want to share with you look let me quickly talk about another big players in Chinese market e-commerce player is JD actually

I work with JD for year I'm we analyzing 1 million J's users you know 10 years of their data

okay we build a a a a a a model and the the Insight is you know JD uh the business model like Amazon okay JD is all the products sold at that time are

owned by JD okay but what happened is differently JD launched so called earn delivery service okay so JD uh uh spent

okay kind of1 billion to launch their its own delivery service the rain reason is try to kind of build trust okay we are message is try to build a trust

between the uh the buyer and sellers okay so this is uh I don't have time to quickly talk about this let me talk about the last example so then we can

finish okay the sharing economy okay the sharing economy uh but the sharing economy back in the western world like uber okay the

main model is like okay so we we wrote this article to challenge the sharing economy in the devel market is mainly is kind of crowdsource the supplier right

but in China actually you see a lot of examples are not croud sourced it's a heavy asset okay provided by the

providers like Jil right so uh it set set up its own right sharing business model called

t Okay so and the prob like the biggest competitor of mbnb China called shiau okay actually I wrote this article with

the co-fund of Shu okay so what happened is mbnb okay all the apartments and houses are owned by you know

landlords but in China okay actually there's a big trust trust problems you know if you ask any of your Chinese friend okay very

few okay they dare to rent apartment for one night okay right the first you know depart was you know

really bad right it's not furnished well right and also it's not safe we will think right so so uh so that's kind of the kind of people have this kind of

trust issues so what happened is for Shu different from nbnb okay the Shu the platform they rent all the apartments and then they furnish the

apartments and then they okay install this Smart Lock and video camera okay so the so what happen is as a guest when

you rent a apartment okay for one night two night even though you kind of sacrifice some kind of privacy but but you feel safe okay because you know they

will check you know whether it's really you okay and and also they monitor you together so so basically you feel safe help you build build trust okay so I

think the main message for me to try to share with you tonight is you know so for e-commerce Market or or for E all the digital economy business model in

Chinese market and also a big Emerging Market okay for them in order for them to become successful they have to address a lot of

the market paino okay resulted from okay industrialization okay to using analogy

is know the market trust is just a air it's like a air okay so when Steve Jobs was born when Jeff beos was born it's

there okay they take it for granted they never realized in the air is so important but the once you enter Chinese market it's like you go travel to when

you travel to Tibet right you don't have a lot of oxygen you have to carry your oxygen tank okay essentially right so so

for the internet business here you have to provide oxygen tank by selling your product or another example would be you know the Silicon

Val companies are selling very cool racing car but in China or or in Southeast Asia or or or Latin America big Emerging Markets it's all m road you

cannot drive a racing car in this in the m road right so the local competitor say okay no problem we are not selling racing car we are just selling probably

a motorcycle but when you buy a motorcycle from us we will build a solid road to your house what's a solid Road R

pay J's own delivery service WeChat payment okay alls infrastructure okay so so so in other

words all the digital economy providers in emerging markets in order for them to sell applications they have to

provide underly infrastructure together right so that's why why Alibaba JD pensent okay or M in China those

internet business they are very heavy asset earners they are kind of infrastructure

providers so what happen is they are providing not only digital economy application but also the

infrastructure which okay were provided by in during the industrialization

process back in the okay West Market okay so that's the key difference here so that's why you see a lot of Chinese

digital economy players they are also become very successful in Southeast Asia and also like us think silica valleys companies they are not successful also

either in in Southeast Asia in also a lot of Emerging Markets okay so that's probably the key message I want to kind of uh try to share with you okay uh

essentially what I try to provide you is just another perspective of the digital economies so you can have at least a

whole picture okay about what's going on in P one the most important Trend in our human life it's digital economy Okay so

this is probably my main message for today's class okay thank you [Applause]