The Little Black Phone That Conquered China

Clay Shirky, Little Rice: Smartphones, Xiaomi, and the Chinese Dream

Unless you’ve lived or worked in China since 2010, you’ve probably never encountered Earth’s third-largest mobile phone company, Xiaomi. The company, whose name translates as “Little Rice” in Chinese, currently dominates China’s mid-range smartphone market. Despite having no market presence in North America or Europe, Xiaomi’s global aspirations have flourished, and in five years, it has progressed from geek-oriented software startup to punching above its weight class.

Clay Shirky, NYU professor and new media cheerleader, sees Xiaomi as emblematic, not of the mobile phone industry, but of China’s changing place in global technology leadership. China has a lengthy reputation as America’s favorite offshore dumping ground; Apple famously labels its products “Designed In California; Assembled In China.” But as Chinese manufacturers become increasingly comfortable with American designs, many have assumed the design role and created native products domestically.

If you’ve experienced the existential dread of realizing you’ve forgotten your phone, you understand how important networked mobile technology has become. This goes double for poor countries. As rising technology puts mobile phones within mass customer reach, villagers in Africa and Asia who cannot afford laptops, cars, or books, nevertheless have global access with affordable phones. Networked mobile access puts poor, distant villagers on (theoretically) equal footing with everyone else.

Shirky quotes technology maven Jan Chipchase that mobile phones have joined money and keys as the three things without which we cannot leave the house. This presents China unprecedented opportunity and unique obstacles. Mainland China remains among Earth’s last nominally Communist nations, though “Communist” now means more party control than economic principle. Mobile phones offer instant global access to information, but also permit instantaneous coordination, anathema to one-party states.

Clay Shirky

Xiaomi straddles this complicated line. The corporation got its start pitching an open-source Android variant operating system, crowdsourcing critical design elements. This democratic hybrid business model remains central to Xiaomi’s success, even as they’ve transitioned into hardware development. But the corporation must tapdance between the Party’s twin mandates of unprecedented personal liberty, and absolute political autocracy. Xiaomi’s technology must permit everyone to do everything… except challenge the state.

Chinese President Xi Jinping has recently pushed something he calls the Chinese Dream. Unlike Maoist slogans of expunging both ancient and Western influences, Xi’s vision has a distinctive monetary value. Like the American Dream, the Chinese Dream involves home ownership, wealth management, and upward mobility. However, it infuses distinct collectivist tenets into its language. Xi wants Chinese to become wealthy in ways that redound positively upon the state.

China actively restricts domestic access to global Internet sources. Chinese citizens can access Amazon, Gmail, and other international sites through demi-legal network loopholes, and enforcement runs two-tiered for elites versus plebeians. Whatever advances business and globalization, the Party deems good, or anyway tacitly permits; whatever permits citizens to organize, coordinate, or pitch any alternative to the state, the Party squashes. (State speech codes forbid puns, to excise double meanings.)

This creates market narrowing for Chinese firms outside China. Shirky describes how, when Xiaomi first marketed phones in South Asia, Indian media generated panic that Xiaomi was shipping user data into China. Well, all mobile service providers store metadata on native server farms; Apple and Samsung do it. Their servers merely dwell in non-totalitarian states. Xiaomi, by contrast, must simultaneously appease state officials and free-market buyers, a difficult global sell.

For Shirky, Xiaomi isn’t another corporation, despite its massive size (its market is huge enough to dwarf international firms while remaining primarily locked inside China’s borders). Rather, Xiaomi represents China’s strange relationship with modernity. China has become economically free but politically restricted; socially diverse but ethnically homogenous; global yet totalitarian. If it survives ten more years, the People’s Republic will become history’s longest-lived one-party state.

Thus China is already making history, even if that history feels muddled to technocratic Western observers. It’s yoked competing influences together, with apparent success, and seems to be winning the global three-legged race. But China’s aggregate wealth hasn’t translated into individual well-being; the typical Chinese citizen remains poor by world standards. How information firms like Xiaomi fare in coming years will define how China faces today’s global situation.

Shirky’s writing combines journalism with technical expertise to describe powerful conflicting influences which will define global market considerations within our lifetimes. Xiaomi’s rapid advance, from zygote to market dominance inside five years, and its odd, counterintuitive business model, are symbolic, for Shirky, of China’s changing role in global economics. To understand China through analogy, Shirty says, let’s understand Xiaomi. That isn’t easy, but it’s decidedly unnerving.