When Winston Ma, CFA, was an engineering student at Shanghai's Fudan University, he dreamed of the day he could leave his native China to further his education in the United States.
Today, with several US degrees and a successful Wall Street career behind him, he has set himself a considerably bigger challenge: to bring US and Chinese talent together as both countries push the boundaries of technological innovation.
“I want to be a bridge,” says Ma. “Chinese and US companies are working on cutting-edge topics, and there are many cross-pollination opportunities.”
To some, Ma’s latest ambition may seem out of step with global trends: the political tide has turned against global integration — at least, for now. European and other world leaders have warned of an impending trade war after the US government introduced tariffs to protect areas of industry deemed strategic.
But Ma, now 44, has impressive credentials on his side. After gaining a law degree from New York University and a successful legal career specialising in derivatives, he began working as a New York investment banker and became an expert on US companies’ investment strategies for the Chinese market.
“Getting into the financial world clearly made use of my quantitative background,” he explains. “But it was also about moving towards the front lines of capital market transactions. I felt I was getting closer to the action.”
Then, in early 2008, Ma took another step closer as he switched to the institutional investor side, becoming one of the first hires of the China Investment Corporation (CIC), the Chinese government’s sovereign wealth fund.
The CIC, where Ma became a managing director first in Beijing and then at the CIC’s North America office, started off with about $200bn under management — a figure that has grown to roughly $800bn today. “We looked for overseas investments with Chinese angles,” he explains. “That meant investing in companies that could benefit from access to the Chinese market.”
Following the cross-border theme, Ma later set up a fund in Silicon Valley that invests in early-stage companies looking to tap into booming Chinese demand.
I always wanted to be ahead of the curve. But at that moment, I realised that I was going to be too far ahead.
It is a long way from his initial aim of following his degree in semiconductor physics with law so that he could forge a career in patents and intellectual property in China. He abandoned that idea after visiting a university friend and witnessing a throng of students turning up to buy copies of pirated software that his friend kept under his bed.
“I always wanted to be ahead of the curve,” he recalls. “But at that moment, I realised that I was going to be too far ahead.” A recurring theme in Ma’s story is his strong belief in sharing knowledge on the untapped potential of cross-border technology, as illustrated by his books China’s Mobile Economy (2016) and Digital Economy 2.0 (2017).
For his latest bridge-building project, Ma is leaving the CIC after a decade to co-found China Silkroad Investment Capital (CSIC). This alternative asset-management platform seeks to make investments with overseas partners across sectors such as energy, financial services, life sciences, and advanced technologies and manufacturing.
For the technology sector, among others, CSIC’s investment strategy rests on Ma’s observations that digital innovation in China has taken a very different path from that of the United States — and that the gap between the two contains fertile ground for investment.
In China, you want one app for everything, but Silicon Valley starts with the premise that you need one app for each thing.
For starters, China has moved quickly into mobile commerce, leading to the rise of giants such as Alibaba, the online marketplace, and Tencent, the social media and telecommunications behemoth. Unlike their US counterparts, however, both have become “super apps” in which users can perform a range of activities without going elsewhere.
“Alibaba is more like a combination of Ebay, PayPal, Google Maps, and Netflix all rolled into one,” he says. “In China, you want one app for everything because life is busy, but Silicon Valley starts with the premise that you need one app for each thing.”
Another opportunity, he asserts, is that, until now, the US thrust into digital innovation has gone mostly into “soft technology” — the software and applications that have disrupted traditional sectors of the economy such as urban transport (Uber, Lyft) or hotels and accommodations (Airbnb). In China, however, its manufacturing expertise and capacity has given its innovators the important advantage of being able to work closely with the country’s industrial plants to develop what he calls the “hard technology” — the smart hardware needed for the internet of things.
China is moving from ‘Made in China’ to ‘Innovated in China.’
In particular, he believes the highly complex system of sourcing and logistics that underpins China’s manufacturing sector will provide lasting advantages in the next phase of innovation, supplying an important opportunity for small-scale hardware start-ups.
“China is moving from ‘Made in China’ to ‘Innovated in China,’” he says. “It means that traditional Chinese manufacturing power is becoming a more important part of the technology picture.”
The challenge, he says, is to find opportunities to bring the two approaches together via cross-border investments that allow Chinese and US innovation to cross-pollinate.
“There will be competition in technology between China and the United States,” he admits. “But why can’t all the entrepreneurs, investors, and stakeholders work together to lead a ground-breaking century of innovation in the digital economy and smart internet? That is a bridge worth building.”