How can a US tech company succeed in China with Scott Livingston

How can a US tech company succeed in China with Scott Livingston
Scott Livingston joined us to discuss the conditions in how a US tech company can succeed in China and navigate the government's regulation of the Internet & media.

Scott Livingston, a senior associate at SIPS, joined us on a discussion starting from a hypothetical question, “What are the requirements do Facebook need to satisfy in order to access into China’s market?”. By navigating through this question, we gain an in depth understanding to how US tech companies should navigate China which combines legislation and policy to regulate the Internet and their ever changing media regulations. Scott explored the deeper questions on the Chinese government’s concept of cyber-sovereignty & internet power. Through looking at the lens of the Chinese government, we discuss the conditions to how a US tech company can succeed in China.

Here are the interesting show notes and links to the discussion (with time-stamps included):

  • Scott Livingston (@SctLivingston, LinkedIn), senior associate at Sips, a IP and IT consultancy based in Hong Kong.
    • How did he start his career? [0:53]
    • What made you move from the US to China? What’s the experience living in China? [2:45]
    • Having worked in various law firms in China, what are his areas of coverage? [3:36]
    • What are the interesting career lessons for Scott in his career so far? [5:05]
  • How can a US tech company succeed in China? [6:50]
    • Recently, Mark Zuckerberg has been criticised for his approach to China, as contrast to Travis Kalanick from Uber (Ref: Zuckerberg and Kalanick in China: Two Approaches). The reason for Zuckerberg’s interest in China, is that Facebook is totally banned in China and he’s trying to figure out how to access the 1B market.
    • Hypothetically, what are the requirements that Facebook need to satisfy in order for the Chinese government to allow them to operate in China? [8:06]
    • Assuming that Zuckerberg is able to generate the necessary amount of government support, China will likely require Facebook to satisfy the following requests:
      • Procure a VATS license, either through a JV, VIE Structure, or, speculative under new law, Wholly Foreign Owned Enterprise (WFOEs). [9:41]
      • Data localization – putting the data servers in China [12:33]
        • Does the Chinese government ask for access to data which is actually similar to US and UK? [13:50]
      • Change to services offerings, for example, LinkedIn not enabling some features of their social network in China.  [15:05]
    • Does Facebook going to China with or with their other assets: Instagram, Whatsapp or Oculus Rift? [16:43]
    • China’s “Great Firewall of China” is well known for banning internet services from the West: Facebook, Twitter and many others. How does this serve the government interests? [17:15]
    • One of the things you’ve written about is Beijing’s new found embrace of a policy known as Cyber-sovereignty. Can you go into a little more detail on this? [19:15]
    • What are the strategies used by the Chinese government to build Internet Power and regulate the Internet with focus to ensure cyber-sovereignty, cyber security and promoting economic development at the same time? [22:57]
    • How are the rules changing for online media in China? [24:20]
    • Why is it that Apple and LinkedIn have been successful in China? How do they manage to do this? [26:40]
    • With the global ambitions from the Chinese Internet companies, how do they deal with the strategic tax and better access to information from the outside world? [30:49]
    • References to Scott’s articles for this discussion:

Podcast Information:

The show is hosted by Bernard Leong (@bleongcw) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Aspirus Desk on Indiegogo (Twitter, Facebook, Medium). Also check out Ideal Workspace’s new standing desk, Aspirus and sign up for their mailing list.