SILICON DRAGON NEWS      @SiliconDragon               December 10, 2018         

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Silicon Dragon
On The Circuit   
China - From Imitator 
To Innovator: A Media Perspective
San Francisco, Dec. 4

Rebecca Fannin, Jon Swartz, Michelle Quinn, Sally Shin

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San Francisco, Dec. 5

David Chivo, David Kaufman, Rebecca Fannin, Moran Bercovici, Harel Kodesh
U.S.-China economic tensions grow over a second Silicon Valley in China in the aftermath of the arrest of Huawei CFO, daughter of the founder of China's telecom giant and world's leading 
smartphone maker 

Ongoing frictions over China's growing technology innovation edge are underscored in the recent arrest of  Huawei's CFO. The increasing power and impact that Chinese tech companies now have in the West can't be denied.  China's tech giants have become a competitive challenge for the U.S. tech elite.  
China technology has gone far beyond imitating western ideas to innovating their own. This trend has unfolded in less than a decade and is gaining momentum. 
Read Forbes: Huawei Rattles 

Market battles between Chinese tech leaders  Tencent and Alibaba over China's fast-growing e-commerce market play out in the recent U.S. $1.3 billion IPO of Chinese fashion retailer Mogu -- the 38th China-based company to go public in the U.S. in a record 2018!
After years of keeping close within their original core business -- e-commerce for Alibaba and social media and gaming for Tencent -- these two Chinese tech titans are duking it out. 
Mogu rejected Alibaba's investment offers early on but Tencent soon angled in.  Tencent is ganging up on Alibaba with other killer moves such as investing in red-hot team-buying mobile shopping app P induoduo.
Alibaba still claims a leading 58 percent share of China  huge $1.1 trillion online shopping sector -- far larger than the U.S. at $713 billion. China's e-commerce market is projected to grow to $1.8 trillion by 2022. 
Read Forbes: Mogu IPO Shows Tencent-Alibaba Rivalry 

China's top unicorn ByteDance, an app maker of Toutiao for today's news and Tik Tok for short, quirky videos, is putting 20% of its own capital toward a new ByteDance $1.45 billion fund, The Information reports, to invest in AI and digital content. That would put in the same league as Xiaomi that has a similar fund investing in closely aligned startups. The next step for the Beijing-based go-getter  ByteDance could be to launch a messaging app competing with China's highly popular social networking app WeChat
Next 10 Ventures is launching a $5 million incubator fund iFlix Creators Hub in Southeast Asia. 

Softbank's huge Vision Fund is forming an investment team and will go after deals in Sequoia, Hillhouse turf. 

 Sequoia China has led a Series B round in short-form video app Lihuh with IDG Capital, ZhenFund, GSR Partners and Capital Today  

South Korean payment app Toss enters the unicorn league with $80 million financing from Kleiner Perkins and Ribbit Capital. 

IDG Capital has backed Chinese mobile payments tool Freemud in a Series A deal of nearly $9 million.    


Conflux raises $35 million from Chinese web giants and Sequoia China for a blockchain protocol that solves scalability issues hobbling projects like Bitcoin.


Natalie Luu is joining the investing team at Lightspeed as a partner, from YCombinator.   

2018 will be beginning of China VC/PE bubble burst because most Chinese funds are 3-5 year investment period + 2 year exit period (vs 5+5+2 extension for US). Investing in early stage is impossible. There will be lots of lawsuits soon. - Andy Yan, top VC at SAIF  h/t @ruima

Send in YOUR predictions for 2019 to
Silicon Dragon:
We will publish top 10 predictions from your submissions in our  next issue and my Forbes column

  People's Republic of Desire documentary captures China's craze for livestreaming led by YY and foretells the rise of newer entrants Tik Tok and Kuaishou.Forbes review
Photo: Movie night  with China watchers in SF.  


China launches rover in historic mission to dark side of the moon.