The segment opens with several sponsor messages promoting AI solutions from IBM, financial tools from Chase, risk management services from The Hartford, and other business services. The core of the recording is an interview conducted by Julia Chatterley with Jennifer Zhu Scott, founding partner of InCapital, at the Bloomberg New Economy Forum in Singapore. Zhu Scott discusses the evolving US‑China technology relationship, noting that recent diplomatic overtures between President Biden and President Xi have created a more collaborative policy framework, but warns that without substantive follow‑through the tensions may revert to a zero‑sum stance. She explains that tech decoupling is likely to persist, driven by the United States’ desire to maintain dominance and China’s large market, talent pipeline, and growing engineering capacity. This leads to parallel technological ecosystems, exemplified by TikTok’s distinct strategies inside and outside China, and forces investors to devise separate capital‑flow strategies across the Pacific. Zhu Scott contrasts global and Chinese regulatory lenses on “good” versus “bad” tech, arguing that China now views deep‑tech fields such as quantum computing, AI, and climate‑tech as the true innovation frontier, while large consumer platforms are seen as potential monopoly risks. She outlines InCapital’s investment focus on deep‑tech verticals—climate tech leveraging AI and blockchain, AI itself, and Web3‑based quantitative trading—while stating that crypto is effectively dead for the foreseeable future. The interview concludes with a brief wrap‑up and a final sponsor read from The Hartford.
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Let's get to our next guest. InCapital founding partner Jennifer Zhu Scott joins me here on the set of the third and final day of the Bloomberg New Economy Forum. Great to have you with us, Jennifer. I think a lot of people have been sensing a little bit of euphoria, at least at the beginning of the week that we saw Presidents Biden and Xi finally talk. We know that the US-China tech tensions have really been weighing on the overall investment picture. How much do the two superpowers really need to collaborate here?
Thank you for having me, Julia. Great to be here. It's a great question. We— the timing of Bloomberg's New Economy Conference this year hasn't been better timing with the framework that President Xi and Biden have laid out really provides a lot of substantial policies and business discussions to fit into this new framework that's more collaborative, seeking to coexist and while embracing each other's differences. So I think this year, of course, there are some hard areas such as, you know, CHIPS Act, in terms of some trade issues, on climate, on Russia, on a lot of those issues, actually, I think now it's on a much more collaborative tone, which is very good news. However, as Kissinger mentioned in the first day, with the framework is very important. The possibility of the bridge has been laid out, but if there's no substance following this framework, we will still get back to back to zero one.
And it does sort of seem like tech decoupling— decoupling, excuse me— is accelerating. What does that mean when you look at the overall tech picture in terms of investability?
I think unfortunately we might see this kind of tech decoupling for a very long time. Because if U.S. continues to deter— you know, define its interest as maintaining the dominance forever, while China at the same time with the largest market, with a ton of capital, and also with, you know, a few times more of engineering students graduating every year, it's impossible to just contain China to stop developing and innovating. For example, with the chip industry, China doesn't really have a semiconductor industry properly. You know, it started only a couple of years ago. And I talked to some of the investors and founders in China. Some of them joke that the founder of China's semiconductor industry is actually Trump. So, so, so I do think this kind of decoupling will continue and it will become more competition, localization of the two countries, localization both in terms of technological localization but also operating. We will see companies like TikTok has a very separate strategy for China and also outside of China. Yeah, for investments, of course, a lot of funds have started looking into a very separate strategy how to bypass or how to navigate this kind of capital from this side of the Pacific to going to some of the tech companies that side and vice versa. However, I think it's not going to stop the activities. It's just making the world much more complex and less interoperable.
Well, interesting you bring up TikTok because we look at user data and the like. I mean, we talk about good and bad tech. Where do you see the line being drawn there? Is there an example they can coexist together? I mean, there's also the connectivity of the world via a lot of these apps that particularly younger people are using?
Great question. I think it's, uh, we have to, we have to look at this group backtracking the kind of global lens and then China lens. And there are some common grounds, but also there are some differences. So globally, I do think we have come to the inflection point. The world realized this digital economy 1.0 with large social media companies not only just bring tremendous negative impact to youth, you know, mental health, and also, you know, make the world much more polarized. I'm on the board of Web Science Trust, which was founded by Tim Berners-Lee himself. Really, you know, gather all those academics to— every year we, we think about what is the function of internet and how internet should develop a growing future. And reflecting back in the, in the '90s that When internet was first invented, it was intended to be, you know, transcending the, you know, national borders and international and democratizing information. But look at where we are today. And so I do think that globally it doesn't matter in Europe that the response mostly comes from regulation. In the US, the response usually comes from antitrust. And China is a very different response altogether. You know, often the world interpreted China's reaction to big tech as cracking down on tech. But the good tech, bad tech context in China is a little bit different compared to this global lens, which is in China. I think the government does not regard those companies that basically gather hundreds of millions of people with smartphones and provide this kind of digitalized daily activity as innovation anymore. Especially a lot of those companies have a problem with monopoly or duopoly or, you know, potentially providing systematic risk in financial markets because they intend to bypass some of the regulation. Yeah, the innovation that the good tech in China, at least speaking from Chinese government's lens, The good techs are the deep tech. So they, they are actually very well-defined areas such as quantum computing.
Is that where you're investing? Because we're running out of time. But I do want to get an idea of where IN Capital is investing.
Yes, we very much focus on deep tech. And the first three verticals, we focus on climate tech using AI, blockchain, a lot of those technologies. But also we focus on AI as well. And right now, those two, these two verticals, we're spending a lot of time to figure out the nuances of the industry and also the nuances of all this new regulatory geopolitical environment. We're also investing in Web3, but mostly on quant trading without touching crypto. I think crypto itself probably is dead for some years to come.
All right. And obviously needs a lot more regulation considering what we've seen recently as well. Thank you so much for your time, Jennifer Zhu. Scott, the InCapital founding partner, with me here on the third and final day of the Bloomberg New Economy Forum, live from Singapore.
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