Tech: Is China Catching Taiwan?

Posted by: Bruce Einhorn on December 11, 2009

The technology gap between Taiwanese and Chinese companies is closing, according to a new survey by Deloitte. The consulting firm yesterday released its annual report on the 500 fastest-growing tech companies in Asia, as measured by revenue growth, and once again Taiwan came out on top, with four companies in the top 10 and 99 total on the list. No great surprise there, since Taiwan is famous for its steady supply of high-growth tech companies.

What is interesting, though, is the impressive rise of China in the Deloitte rankings. Four mainland Chinese companies also make the top 10, including the No. 1 company, online retailer Vancl.com. And with 97 companies overall, China is now virtually tied with Taiwan. That’s a big jump: Only two years ago, the number of Chinese companies on the Deloitte list was about half that of Taiwanese.

“We’ve seen a significant upswing in the number of Chinese companies,” says Jolyon Barker, Deloitte’s global managing partner for technology, who notes that Chinese companies targeting domestic demand have a big edge. “We are starting to see China beginning to compete at an R&D level and an innovation level in a market that, of course, is colossal,” he says.

China’s rise isn’t necessarily a setback for Taiwan. Many of the fast-growing Chinese companies have Taiwanese ties, points out William Chou, managing partner for technology in Deloitte’s China office. As evidence of the rapid integration of the two sides, Chou cites estimates that more than 1 million Taiwanese (out of a total population of just 23 million) now live in the Shanghai area. “This is one economy,” he says. “You can’t distinguish between these two areas. The market is in the mainland and the talented people follow the market.”

So who’s to say what’s really a fast-growing Chinese tech company and what’s a fast-growing tech company based in China but run by people who have moved across the Taiwan Strait? Either way, China wins. For years, people who follow China’s tech sector have predicted that the world will see a surge in innovation coming from the mainland. With a few exceptions (Huawei and ZTE come to mind), that hasn’t happened. The latest Deloitte report could be a sign that the long-awaited wave of innovative Chinese tech companies might finally be upon us.

Reader Comments

failure

December 11, 2009 5:12 PM

Very soon China will catch up and beat US too thanks to the restrictive immigration policies which is forcing thousands of talented people to go back to China

India india ind...

December 12, 2009 2:14 AM

How does India fair in the report ?

Is China Catching up with China?

December 13, 2009 8:29 PM

I have a sense that not, yet. We haven't seen nothing yet of the creativity that will be coming out of the land that gave paper, printing - computers of its days, gun powder - nuclear weapons of the ancient world, and compass - aircraft carriers of the old age, and of course much more unlisted. With an absence of 150 years of world innovations, the Chinese are just getting started. "Stability overrides everything", give it another 50 years, we will know.

Edward Eng

December 13, 2009 9:24 PM

We will definitely see a huge innovation spurt in China in the near future. With an economy that is emerging at such a quick pace, we are bound to see innovation come from domestic sources as well as international sources. Even if the strength of innovation currently lies outside of China, the depth of China's market will draw innovation to itself. This will cause China to turn up it's innovative juices. Take a look at what is happening with 'green' technology throughout the world and how much attention is focused on China and what they are accomplishing. Additionally, China will come up with innovative ideas for their own market before other countries can because China can adapt to the local people's needs the quickest.

-Edward Eng
http://blog.getchee.com

Fardream

December 14, 2009 12:40 AM

Taiwanese have no tech companies. These companies are fed by the blood of workers in Mainland China to export some tech stuff like iPod - you found designed by Apple Inc. on it. Yet when the export sectors sour, Taiwanese simply run away and force Guangdong's government to pay the compensation for all these workers sickened by their exploitation.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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