Paul Schulte, founder of Schulte Research, explains why Chinese tech companies, especially fintech firms, have stealthily gained advantages over their largest US rivals. Developing their models from scratch, Chinese businesses are leapfrogging the West, where finance is encumbered by old-school cartels and tech is contending with a consumer backlash and regulatory oversight.
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China's Fintech Advantage (w/ Paul Schulte) | Expert View | Real Vision™
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Transcript:
We are seeing something happening in China, which is very symptomatic of the emerging world and the frontier world, and that is basically that we have systems in place where there's no there there, there was a primitive, elementary financial system in China, which basically was 365 day lending. That was the extent of the financial system. And in the last several years, Alibaba and Tencent have come along and they've been able to create new, organic systems from scratch, because there was basically a tabula rasa. In the case of the US, the UK, and Europe, you've had decades old technology, which is very hard to adapt and change. It's backward looking. It is paper-based. There are regulators who are on the warpath, there are lobbyists who do not want change, and there are incumbent cartels who are very comfortable in the current configuration and don't want to have anything change. And so on the one hand, in China and other emerging markets, you have this astonishing level of flexibility. And on the other hand, in the West, you've had this ossified, aging regulatory ivy growing up the wall with powerful lobbyists.
