Chinese firms closing gap on US tech giants like Google

No Chinese company has wide international brand recognition, but e-commerce giant Alibaba may change that. Its initial public offering in New York on Friday, tipped to be the largest ever in the United States, has understandably gained global attention. If, as expected, US$21 billion is raised, the previous record flotation by Facebook and Visa will have been bested and its valuation could be almost as much as Amazon's. The listing will be a watershed moment for China's technology firms.

Alibaba and China's other internet goliaths, Baidu and Tencent, are among the world's biggest tech companies, but their names are barely known overseas. Turnover for Alibaba is greater than American counterparts Amazon and eBay combined; it accounts for 80 per cent of the mainland's online retail sales. Had Hong Kong regulators not rejected the company's IPO application, its name would not have made such a splash in the US media. With a New York listing, its operations and ambitions and those of its Chinese rivals are squarely in the international spotlight.

That is not to say that Chinese tech firms have not already been making waves. They have been acquiring high-profile talent and innovative start-ups in Silicon Valley and elsewhere to energise operations. Alibaba's hirings have included Google's head of investor relations Jane Penner and PepsiCo executive Jim Wilkinson, while Android's Hugo Barra has joined consumer electronics firm Xiaomi. Baidu has snared Microsoft's Asia-Pacific research and development chief Zhang Yaqin and Google artificial intelligence expert Andrew Ng.

Such people give links to foreign markets and add credibility. China is known overseas less as an innovator than a copier of ideas; hiring respected scientists and businesspeople changes that perception. Buying and investing in start-ups enables the nurturing of innovative ideas that can add to existing products and create new ones to deal with increasing competition. Developed countries have higher internet penetration than China, leaving a lot of catching up and huge profits still to be made by internet-related companies.

Attaining the global stature of tech leaders Google and Microsoft requires agility and innovation. Healthy competition will help Chinese internet firms reach such heights. Chinese companies are coming up with world-beating ideas; it is only a matter of time before their brands have global recognition.