China probably won't come up with an industry-redefining product like the iPhone anytime soon, but entrepreneurs there can create giant, efficient businesses, said Kai-Fu Lee, the chief executive officer of the Beijing-based venture-capital firm Innovation Works.
Chinese companies including Baidu, Tencent and PaPa have executed similar strategies as Microsoft and Facebook, Lee said on Bloomberg TV. China isn't ready to match the accomplishments of Apple or Google, which Lee identified as part of an elite group responsible for "paradigm-shift" inventions. Lee used to work at those two companies as well as at Microsoft.
"It's hard for China to have an Apple or a Google," Lee said, "but I do think it's possible for China to have a next-generation company that's maybe a mini Microsoft or a mini Facebook or an Instagram. I separate these types of companies as strong-execution companies."
Lee spoke with Bloomberg West in a wide-ranging interview about Apple's struggles in China, as well as the role of social media and mobile in the country's culture. The part about the "iterative type of innovation" starts around the 4:30 mark.