In this chapter, Kai-fu Lee explains how the love for centralization and deference to authority impact China’s digital revolution.

The government in China knew that it would take the tradition-loving Chinese people decades to become interested in tech. So it made techie startups attractive both psychologically and financially by investing in them. Psychologically, people felt better about working for a startup if it was, at least in part, a government job. Financially, the government ate the losses of such investments and when there was a win, passed in most of the profit to private owners.

Here Lee once again demonstrates that he understands China but not the US. He says that this kind of government involvement is something that Americans can’t imagine. But he’s wrong. According to his own classification, the US invests in an almost identical way into what gives it its best strength, education. Lee started the book by pointing out that the Chinese are great at executing while Americans are great at doing the R&D. So he should be able to make the leap and see the parallel between Americans loving goods mass-produced in China and the Chinese loving the US education. (And obviously each side bitches incessantly about the other’s product while still consuming it obsessively).

Another interesting point about centralization is that Lee believes that the biggest advantage of the Chinese digital platforms is that they offer “a one-stop shop” like the US giants Facebook and Twitter don’t. The Chinese version of Facebook, he says, not only lets you chat to friends but pay for goods, set up medical appointments, get medical test results, etc. Lee clearly thinks it’s a great thing – and I’m sure it is for the owners of the platform – but I wouldn’t want to connect my bank account and my medical records to my FB account. I don’t believe there’s a great hunger for centralization in the US. People seem quite comfortable with their different apps for different things.

Throughout this book, Lee’s very interesting and valuable argument is undermined by his contempt for and lack of understanding of the US. Not surprisingly, he constantly berates the US for its contempt for and lack of understanding of China.