There is a crucial difference between the words displacement and disruption. Chinese firms have by and large so far been displacers rather than disruptors. The former condition is where a new firm defeats an older one in its own game due to scale reasons. The latter means that some new technology or business innovation has eliminated or reduced the business of an existing older firm. Chine apparel makers have reduced the cost and won over the textile industry in Europe while solar panel and wind turbine manufacturers have had a similar impact on Europe of displacement. But all that is changing. Xiaomi’s customers are pleased due to the weekly OS updates. WeChat could have been just a cheap Whatsapp rip-off but instead it has unique features and thus captured market in China. Haier’s operational efficiency means that it can transport its goods to market much quicker than others. Barring the Chinese entrepreneurial short-term attitude, such innovative business should flourish over the next few years.


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