While China is well on its way to becoming a key player in fields like AI, by far the greatest thing preventing it from becoming the "next Silicon Valley" is censorship and protectionism of the Chinese government. The fact that online social platforms in China have to play by the CPC's rules makes it extremely difficult for a service to have both a mainland Chinese and international market. Places like the E.U. and large democracies like India have a huge competative advantage due to the fact that there are very few bureaucratic and political hurdles to get a business started.
It's not just censorship and protectionism. China is just too used to attempting to centralizing everything. There's a cost. The reason why is because central offices will eventually lack needed localized knowledge to make optimal decisions, resulting in inefficiency, less creativity, and slowdowns when it comes to changing in response to problems or other new conditions. It's a bit ironic that the country that revolutionalized guerilla warfare fails to see this.
China is the best place in the world to start a startup if...you are chinese focusing on the chinese market. China’s outright hostility to immigration and the lack of much international diversity means that it will necessarily be a closed system for the foreseeable future. That’s not even to mention the great firewall and still wicked pollution problems.
No one knows if Chinese consumer sites/apps like Weibo, Tencent etc can compete in an open market. Maybe they can but if so, why hide behind the Great Firewall?
Many Chinese tech companies are expanding overseas, just not much in North America, mostly in high growth areas in Asia. They also own and control many well-known mobile game studios. TBH, apps like Facebook and even Snapchat copied features from Chinese apps like Wechat and Alipay.
