Page 121 - How China Is Winning the Tech Race

the virus sent Americans scurrying back to the safety of California, where
they kept their distance from Mainland Chinese entrepreneurs who had
escaped to the Valley. China deal making went dead.
One of my most memorable times in China was at the height of the SARS
scare. I was in Shanghai. A get-together for the Palo Alto firm Focus Ventures
was canceled, and a Red Herring conference had only about a dozen
attendees, all comparing notes on what precautions to take. I holed up in the
Hyatt Hotel overlooking the Bund, about the only foreigner left in the hotel.
After a thundery night at the Hyatt, with lightning hitting the support beams
outside my window, my Hong Kong editor, V. G. Kulkarni, urged me to catch
the next flight out, which I did. Once in Hong Kong, I found everyone
wearing face masks and gloves, which I quickly donned too. A few days later
word got out that the airport might be closed, and I managed to get a ticket
on a full flight of escapees from Hong Kong to San Francisco.

Silicon Valley bridge
The importance of being local has been a well-rehearsed industry refrain ever
since Benno Schmidt established the first venture capital firm, J.H. Whitney
& Co., in 1946. For more than half a century, venture capitalists stayed close
to home until suddenly they saw the horizon. Their dreams inflated by the
Internet bubble, they began going international, first in the 1990s to the more
familiar cultures of Europe and then to Asia around the turn of the century.
Many initially looked to English-speaking Singapore as the first stopping-off
point in Asia, largely because of that island nation’s head-over-heels desire to
foster an entrepreneurial climate like that in the Valley. Singapore was a
springboard for investments in Southeast Asia. But with the Asian financial
crisis of 1997 and the subsequent meltdown of the region’s economies,
venture capitalists went home empty-handed. China, with its huge markets
and newly reforming economy, became the next focal point.
Helping to fuel the increased interest in Chinese start-ups is a reverse
migration of U.S.-trained Chinese natives: Stanford- and Berkeley-schooled
engineers who were at the front ranks of the Internet revolution. The Chinese
government’s push to imitate the Valley’s tech success in the booming
economy is another contributor.

Silicon V alley’ s T ech Route to China 95