Net Results/Karlin Lillington: Anyone with doubts as to China's rapidly growing appeal to the technology world need only look at a couple of developments during the past week. First off, there was the initial public offering (remember those?) of Baidu, a search engine company often termed "the Google of China".
The Los Angeles Times reported its phenomenal stock market debut with the headline, "Beijing Firm's Stock Sale Echoes Dotcom Boom".
Echoed? It trumped many of those yester-millennium offerings, soaring to 354 per cent above the offering price last Friday, the biggest jump since 2000. Baidu shares ended up at $122.54 (€99) on the opening day on Wall Street, apparently making millionaires out of 100 of its 700 employees. It hit $151.21 at one point before settling down.
As startling as that opening gambit for any company is, I have to keep slapping myself to remember that we are talking about a company in Beijing. In China. Launching on Wall Street. Making its workers millionaires.
Could anything say "things have changed" more clearly? Yes, Shanghai is amazing, full of skyscrapers and hungry tech companies and great restaurants. There are Chinese rock stars and the population no longer walks about in Mao jackets. China has transformed itself in dramatic ways for years and everyone I know who has visited, either as a tourist or businessperson, finds the country deeply impressive.
But still, this is mind-boggling. What next, vendors flogging "We love capitalism" T-shirts in Tiananmen Square? Or how about a Chinese company trying to buy a major US oil company?
Well, surprise, that could have and perhaps, should have happened this week if all other things were equal, but one of the things that wasn't equal was the attitude of the US legislature to the thought of a big US company - in this case, Unocal - being gobbled up by a Chinese company, CNOOC Ltd.
Some in Congress said the buyout would be a threat to security. This is the same Congress that placed such outdated restrictions for so long on the sale of electronics due to security concerns that the Pentium chip fell under the classification of a highly sensitive item, meaning for a long time, computer makers couldn't sell a basic desktop into Beijing.
The Chinese had the last laugh, with Chinese company Lenovo buying up IBM's PC division, showing they understand that basic rule of US capitalism: if you can't beat 'em, buy 'em. Meanwhile, Yahoo has just bought a 40 per cent stake in a big Chinese e-commerce site, Alibaba, for one billion dollars, which also runs the biggest Chinese auction site, Tao Bao, "the Chinese eBay".
And therein lies the twist - according to business magazine Forbes, the real eBay is interested in the Chinese market. It is going head to head with Tao Bao to have the largest slice of the auction market, and will not be thrilled that Yahoo has come moseying in.
Yahoo's investment in Alibaba will put some serious wind in Tao Bao's sails, and has given Yahoo a very strong strategic position in China's growing e-commerce sector. This is happening in a country where the government still places restrictions on how e-commerce and other information sector firms can operate. The LA Times noted that Baidu was required to shut down its server for one week in June 2002 and pay a fine because it reported that "our search results contained certain content that the authorities considered socially harmful".
Still, with 103 million internet users, China will have a hard time controlling what people do online and the fact that a Chinese search engine could skyrocket on Wall Street indicates other people with money think the Chinese net is going to be relatively open, and e-commerce healthy.
And if slightly arrogant whimsicality is proof of bona fide dotcom entrepreneurs, then Western investors will feel reassured that one of Baidu's founders has named all the company's meeting rooms after Sung Dynasty poems.
klillington@irish-times.ie
weblog: http://weblog.techno-culture.com
