China absurdities overheard in Silicon Valley, courtesy of Xiaomi’s Hugo Barra

During a recent trip to Silicon Valley, Xiaomi vice president and former Google exec Hugo Barra took to Twitter to post some entertaining yet saddening misconceptions about China that he heard from Valley veterans. While these “absurdities” are by no means representative of everyone in Silicon Valley, they certainly show how in the dark many people in both Silicon Valley and elsewhere can be about China.

We decided to post these tweets to see if we can shed some light on where these delusions came from and why they’re wrong, as it’s certainly not the first time we’ve heard them.

China absurdities heard in Silicon Valley: #1 Chinese gov owns 51% of all companies in China

— Hugo Barra (@hbarra) November 1, 2014

This is probably the most forgivable assumption. No, the Chinese government does not own 51 percent of all companies in China. Most companies are completely private and operate as such.

The “51 percent” idea stems from state-owned entities that list on domestic stock markets. To maintain control of those enterprises and channel funds to them as it sees fit, the government keeps a majority share ownership, but this does not extend to private companies.

All three major of China’s telcos are majority-owned by the government in this way, as are most major utilities and oil companies in the country.

China absurdities heard in Silicon Valley: #2 Chinese gov owns all IP created after 5 years

— Hugo Barra (@hbarra) November 1, 2014

This one’s a bit harder to find the root of (do let us know in the comments if you have any idea where this came from). No, the Chinese government does not own all intellectual property created after five years, or after any length of time so long as those trademarks, copyrights, and patents are renewed.

When Mao Zedong was in power, property rights were more or less non-existent, and that went for intellectual property as well. But since the 1980s, China has established multiple IP laws and continued improving on them to protect creators.

That said, it still has a long way to go as far as enforcing those laws on the mainland and abroad, as infringement is a widespread problem. While we’re at it, junk patents are another major pain point in the system.

China absurdities heard in Silicon Valley: #3 a major VC investor had never heard of Huawei or Lenovo

— Hugo Barra (@hbarra) November 1, 2014

Okay, I can understand if the average US citizen has never heard of Huawei. It’s not listed on any international stock markets, it just started selling its phones on American soil, and the company is notoriously media shy.

But Lenovo? I have a hard time believing that. It’s the biggest PC maker in the world, is publicly listed in Hong Kong, and was largely born out of IBM’s former PC arm. It has a second headquarters in North Carolina and just bought Motorola from Google for US$2.91 billion. To think that a major VC in Silicon Valley had never even heard of it is mind boggling.

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China absurdities overheard in Silicon Valley, courtesy of Xiaomi’s Hugo Barra