By Clay Chandler and Eamon Barrett
September 15, 2018

Greetings from Hong Kong, where we are battening the hatches in anticipation of Typhoon Mangkhut, a tropical storm said to have the equivalent force of Hurricane Florence. According to some experts, Mangkhut could be the biggest storm to hit Hong Kong “since records began.” We’ll see. But since moving a few years ago from a downtown high-rise to a beachside village on Hong Kong Island’s southeastern tip, I’ve learned the hard way to take typhoon warnings seriously. As I write, I can hear the waves booming; they’re expected to reach 23 feet by tomorrow night.

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Typhoons aren’t the only area in which China is giving the U.S. a run for its money. Tech Node founder Gang Lu complains in an essay published yesterday that virtually all the features touted by Apple CEO Tim Cook at Apple’s Sept. 13 launch event as breakthrough innovations unique to the latest generation of iPhones are, in fact, derivatives of technologies already widely used in China. Lu describes himself as a die-hard Apple fan. But he laments that big screens, borderless screens, dual-cameras, and dual-SIM cards are commonplace in China. Lu’s conclusion after watching the Apple roll-out: “For the first time, I found iPhone is replaceable.”

The Wall Street Journal concurs that Apple’s “Chinese rivals already offer similar features for less money.” The Journal argues Apple has adopted many of those new features for the express purpose of hanging on to Chinese consumers, who account for about a fifth of the company’s global sales. Will a copy-cat strategy be enough to help Apple maintain, much less grow, its China market share?

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While Apple has assiduously courted the China market, Google has—until recently—remained a conscientious objector. The U.S. search giant began operating in China in 2000. In 2005, Google hired Microsoft tech leader Kai-Fu Lee to head its China operations and, by 2009, claimed a 36% market share in China with a limited search product that bowed to some government censorship restrictions. In 2010, Google abruptly withdrew from China, citing repressive censorship rules and attacks on its own systems by Chinese government-backed hackers.

Recent reports suggest Google is having second thoughts about that decision and is developing a censor-friendly search product called “Dragonfly.” In a New York Times column Kara Swisher argues Google’s return to China would be a far greater scandal than its refusal to provide a platform for conservative extremists in the U.S.. Swisher ascribes Google’s eagerness to abandon its principles in China to data lust. She cites a central thesis of Kai-Fu Lee’s new book, “AI Superpowers: China, Silicon Valley, and the New World Order”: the future of computing “will be enjoyed only by those with the ability to essentially shove increasing amounts of data into the maw of the machine.”

But is that thesis true? Does the future of AI belong to those with access to the deepest oceans of crunchable data? Or are there alternative approaches to AI that don’t depend on scale alone? It’s a topic we’re thinking about a lot at Fortune these days, not least because “Innovation in the Age of AI” is the theme of this year’s Fortune Global Tech Forum in Guangzhou. If you have insights, we’d love to hear from you.

More China news below.

Clay Chandler


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