China engineer-turned-venture capitalist sees opportunities in ageing workforce and new tech

John Wu, an engineer who is treading a new path as a venture capitalist, has faith in matters of a cyclical nature despite feeling queasy about the mainland’s intimacy with thriving internet-related businesses.

A former chief technology officer of Alibaba, Wu now sits at the head of FengHe Fund Management as chairman. He contends that China’s path-breaking experiment to enact economic and financial reforms should be based on expectations of a shrinking workforce, not just by raising its bets on the new online-to-offline (O2O) commerce models sweeping across the country, models he has some qualms about.

FengHe focuses on early stage start-ups.

“Internet technologies have proved to be a great thing to make the world better for people, but not all models based on them are well founded,” he said. “In China, business success hinges on the capacity to overcome the looming labour shortage ahead.”

The size of China’s workforce, those aged between 16 and 59, is likely to fall more than 23 per cent by 2050, according to the Ministry of Human Resources and Social Security.

By that date, the working population in China will fall to about 700 million from the current 911 million, increasing pressure on the world’s second-largest economy to enhance productivity to deal with the problem of age.

“It’s obvious that ageing will be the enemy within facing China’s economy in the coming decades,” Wu said. “The potential tremendous demographic change means that a new cycle is taking shape and investors must adapt to the changes to sniff out opportunities.”