China citizens are proud the country can compete with the US on AI, venture fund manager says

• Speaking to CNBC's Eunice Yoon, Yeung described how technology consumers were starting to want more protection for their data from large-scale platforms, namechecking the EU's new General Data Protection Regulation (GDPR) — which came into force earlier this year.
• But in China, Yeung described a different view on data protection.
• "I think there are a lot of Chinese citizens really proud of the fact that we're actually big enough to even be able to compete with the U.S. in terms of AI. And I think it is just a really exciting time to be in China," she said.

A fundamental difference in the mindset of Chinese citizens, compared to people in other major economies, means that artificial intelligence (AI) could see significant success in the Asian powerhouse, Edith Yeung, head of 500 Startups' China unit, told CNBC Tuesday.

Speaking to CNBC's Eunice Yoon, Yeung described how technology consumers were starting to want more protection for their data from large-scale platforms, namechecking the EU's new General Data Protection Regulation (GDPR) — which came into force earlier this year.

But in China, Yeung described a different view on data protection.

"Chinese people are aware of it (data protection) but in general if you talk to most of the normal people they understand there could be big platforms that have access to their data but they're OK with it because of the national pride of wanting to help to be the number one in AI for the whole of China. That mindset is even greater then 'hey I just want to protect my data'," she said at East Tech West in the Nansha district of Guangzhou, China.

"China is so interesting because there is so much data," she added, suggesting that this willingness from the Chinese public will aid data-hungry firms who are looking to enhance and launch new AI projects.

"I think there are a lot of Chinese citizens really proud of the fact that we're actually big enough to even be able to compete with the U.S. in terms of AI. And I think it is just a really exciting time to be in China."

Government policy

Yeung also talked about the Chinese internet report 2018, that she created, and the impact government policy in the country has on the internet landscape.

"Everything in China is really not that scary. It's actually really exciting to help decipher what is going on," she said. "But what we can't ignore is that the Chinese government is very particular in content."

"If in sensitive cases, the government may ask you to take a certain application down. For cases like this, it is less of a worry for investors, honestly, because we don't actively operate any of these apps," Yeung said. "But certainly we want to make sure entrepreneurs and founders that we invest in are aware of this regulatory policy to make sure they don't get into trouble."

Dave Zhong/Getty Images for CNBC International

Edith Yeung, Head of Greater China & Partner of 500 Startups China, speaks during Fireside Chat on Day 1 of CNBC East Tech West at LN Garden Hotel Nansha Guangzhou on November 27, 2018 in Nansha, Guangzhou, China.

The venture fund manager was also asked by CNBC on what kind of start-ups she was currently looking for. Her previous investments include Stellar, Nebulas, Solana, Oasis Labs, Hooked, DayDayCook, Silk Labs (acquired by Apple), Fleksy (acquired by Pinterest), AISense, and Penrose, according to her website.

"It really depends what you are working on. It is hard for us to get to know a company within five minutes. But what we want to know is that you have a good understanding of the landscape and point out the obvious," she said.

"It's completely OK to say (for example), 'We are solving the payment issue for health care because that is unique ... If you can be very specific — and you are the person solving that problem, it is very interesting for us," she added.

Yeung has invested in over 40 mobile, virtual reality, augmented reality, AI, and machine-learning start-ups.