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Technology and Innovation. One of the common arguments in the wake of the Snowden revelations about NSA surveillance is that other countries are going to double down on developing their own technology industries to reduce their dependence on U. Yuan, who spent eight years in the United States, shows the difficulties of converting the attention to NSA surveillance into economics, painting a frank picture of the barriers to growth and innovation for Chinese companies.

He also takes a much less techno-nationalist tone on the growth of a Chinese cybersecurity industry then the NSA spying promotes domestic industry argument would suggest.

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Now, according to Yuan, domestic companies realize the need to invest in security and the government is focused on the problem. In both private and public sector funding, the United States dwarfs China. According to Yuan, the U. Yuan also notes a vast difference in the scale of cybersecurity companies.

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The pressure to maintain high sales means Chinese companies have no time to develop products and cultivate customers. Yuan sees entrepreneurs having difficulty getting into and out of the sector.

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The barriers to entry are high with numerous government regulations and certificates. Preferential policies help large companies and squeeze start-ups. Exits for small companies are hard.

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Yuan stresses that here are no equivalents to IBM, Cisco, or Intel buying up small companies as a major difference in the Chinese and American industries. In his speech, Yuan suggests that he will be attacked for airing these weaknesses.

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But the more politically sensitive part of the speech is his call for "open competition. No country can ensure the safety of the entire supply chain of a product, and insisting on labels that say a product is developed locally will not make China safer.

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But in the end, the main impetus for this will not be government policy, but a mechanism that will be familiar and welcome to his counterparts in Silicon Valley: competition. More on: China Cybersecurity Technology and Innovation Brazil One of the common arguments in the wake of the Snowden revelations about NSA surveillance is that other countries are going to double down on developing their own technology industries to reduce their dependence on U.

Yuan highlights at least three problems China will face: Awareness.

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