China’s Government is Stifling Tech Innovation and Prolonging Social Problems

Image via Reuters

From a purely mercenary point of view, one of the wonderful things about solving a problem is that there’s often a way to make money from it. Solving problems in a way that can help people and bring in profits is the goal of most technology companies at the most basic level, and it’s something that the past 15 years have proven they do quite well.

China is not a country that is lacking for problems. Although its economic growth speed has set records, that growth has come along with some major growing pains. And time and time again, when Chinese startups step up and try to address these problems, they are delayed, stymied, or outright banned by the Chinese government. When tech companies tried to make buying train tickets online less of a pain, the government banned their apps. When Taobao tried to make visiting the hospital more convenient, the government told it to stop. As taxi finding apps try to make finding transportation easier for everyone, Chinese local governments have been banning them outright or just banning the ones that try to turn a profit.

Yes, there’s a rationale behind each of these bans, but ultimately I think it really just comes down to an odd sort of territorialism/protectionism. The government keeps pretty tight control over things like transportation and healthcare because they’re important services, but it is unwilling to let go of that control — and the money that comes along with it — even when China’s private companies have come up with ways to solve the very real and very major problems that plague these industries.

I do understand the impulse to protect the public from the sharpest edges of capitalism, but as people have suggested, unless the apps are outright scams — and they’re not in any of these cases — consumers should be given the ultimate choice. If they want to pay a few extra RMB for the convenience of a well-designed user interface and a smooth user experience, why shouldn’t they be allowed to, especially if those new services also have the potential to solve real-life problems?

China has a vibrant, strong tech industry, but local governments are letting some of its talent and value go to waste by not allowing it to take a crack at these social issues. And since the government itself has thus far failed to solve them — finding cabs at rush hour is only getting harder; hospitals have been a nightmare of waiting for years — the fact that it won’t let anyone else even try seems awfully selfish. If it’s really about the consumers, don’t Chinese consumers deserve a service that actually solves the problem?

I am hoping that these bans are just bumps along the road and that over time, China will adopt a more open and productive policy when it comes to allowing tech companies and startups to build products that help solve problems in public-interest industries like transportation and healthcare. But China’s governments would be well-advised to allow tech companies more leeway in tackling these problems. If the citizens are well-served, the tech company is making more money, and the government gets fewer complaints about the problem, isn’t that a win-win-win?