Can China become the world’s innovation leader?

I’ve been a skeptic, mainly because I don’t see how an economy dominated by state-owned enterprises can take the lead in disruptive technologies. But at the Fortune Most Powerful Women International event in Hong Kong today, I was surrounded by women who disagree.

“We see China leapfrogging in digital technologies over a lot of the developed world,” said Kathryn Shih, president of Asia Pacific for UBS. And while China’s state-owned enterprises may not be the world’s technology leaders, China’s consumers certainly are. “Consumers have embraced technology here much faster than their counterparts in other parts of the world,” says Wan Ling Martello, head of Asia for Nestlé. “E-commerce is bigger in China than in the U.S. and Europe combined.”

Martello sits on the board of Alibaba, and says China’s big three tech companies—known collectively as BAT (Baidu, Alibaba, Tencent)—are underappreciated in the West, where the ruling acronym is FANG (Facebook, Amazon, Netflix, Google). “I think what they are doing is much more expansive than what people are doing in the U.S.,” says Martello. “They are doing very interesting things that aren’t well understood by their Western counterparts.”

Even in the cutting edge world of artificial intelligence, the top three countries—the U.S., India, and China—“all have an abundance of talent,” says Leonie Valentine, managing director for Google Hong Kong. “It’s less a race and more a collaboration.”

I’m spending part of my time this week in search of top Chinese innovators, in order to bring them to the Fortune Global Forum in Guangzhou Dec. 6-8. It’s our premier CEO event, and while attendance is by invitation only, CEO Daily readers get special consideration. You can request an invitation here.

And if you are in New York, you may want to join our Fortune China Leadership Dinner on March 13, where I’ll be interviewing Fed Ex CEO Fred Smith on the future of globalization, and where we will be gathering ideas for the Guangzhou event. If you want to be considered, send an email to NYChinaDinner@fortuneconf.com.

News below.

Top News

• Trump’s Budget Draft Sets up GOP Clash

President Donald Trump will ask Congress today for a $54 billion increase in defense spending, 2%-3% above over current levels, with corresponding cuts in domestic and foreign programs, (notably at the EPA, IRS and State Department, says the New York Times). He appears unlikely to propose the cuts to entitlement programs such as Social Security, Medicare, and Medicaid that have been a staple policy of House Speaker Paul Ryan and other senior Republicans, thus setting up something akin to a battle for the soul of the GOP. The Dow Jones Industrial Average hit a record-breaking 12^th straight all-time high in anticipation. Fortune

• Globalization’s Not Dead, Says Immelt

Any resemblance to Punk or Monty Python’s parrot is pure coincidence. GE CEO Jeff Immelt told shareholders that globalization isn’t dead, even if it felt that way to a "global elite…who see the world only from financial centers or a website.” Immelt argued that GE’s own footprint around the world (viz. the recent acquisition of Alstom’s energy business) insulated it against a broadening assault on global trade. He also reiterated GE’s support for the new administration’s plans to “level the playing field” for U.S. exporters. That overshadowed Immelt’s admission that GE’s diversified structure had failed last year to offset the drag from low energy prices that hit its oil and gas division (now merging with Baker Hughes). Fortune

• FCC Gives AT&T/Time Warner a Pass

AT&T’s proposed merger with Time Warner looks likelier to go through after Ajit Pai, the new head of the Federal Communications Commission, said he didn’t expect to review it. Pai argued that the deal doesn’t involve the transfer of any airwave licenses, which would normally be the “regulatory hook” for FCC involvement. That still leaves the deal open to review by the Justice Department. President Donald Trump had famously promised to block the deal last year if elected, claiming that the transfer of CNN to AT&T would concentrate too much power in too few hands. Fortune

• Spring in the Air, YouTube in the Pipes

Maybe it’s the effect of AT&T/Time Warner, maybe it’s just spring in the air, but the chilly relationships between content providers and carriers look like they are thawing. Netflix CEO Reed Hastings charmed an audience full of telco executives at the Mobile World Congress Monday, explaining how its own data compression advances made it the ideal partner for them, able to deliver high-quality content with minimal bandwidth use (and thus cement the loyalty of carriers’ customers). The love also went in the other direction, as Comcast said it will add YouTube (fast closing in on TV as the most-watched medium in the U.S.) to its X1 digital set-top boxes later this year. Comcast’s announcement is especially striking due to the increasingly direct competition between its own TV offerings and YouTube. Fortune

Around the Water Cooler

• Stable Door Closes, Sound of Hooves Fades

Amit Singhal, a senior vice-president for engineering at Uber, was asked to resign by CEO Travis Kalanick after the company was confronted with evidence that he left his former employer, Google, after a sexual harassment dispute. Singhal still denies the substance of the allegations but acknowledged the fact of an investigation into him, which he had earlier hidden from Uber. Kalanick is trying hard to undo impressions of an incurably sexist corporate culture at Uber after a viral blog by Susan Fowler, a former engineer, last week. There is, according to Recode, no direct link between Fowler’s revelations and Singhal’s ouster. The irony of Uber being embarrassed by a failure to carry out a thorough background check will not be lost on some of its passengers. Fortune

• AIG Shareholders Target Hancock

Shareholders in AIG are considering a campaign to oust CEO Peter Hancock after a disastrous earnings report for the fourth quarter, according to The Wall Street Journal. As we noted last week, the company swung to a $3 billion loss after taking a $5.6 billion charge against its global property-casualty business. The WSJ reported that much of that charge stemmed from 2011-2014, when Hancock was running the property-casualty unit. AIG argues that much of the reserve charge will be covered by a reinsurance agreement with Berkshire Hathaway. WSJ, subscription required

• Samsung Chief to Be Indicted

Samsung Electronics vice-chairman Lee Jae-yong is set to be indicted on four counts of bribery and embezzlement, in which Samsung paid some $47 million to politically-connected insiders to grease the wheels of a corporate restructuring that abused minority shareholders. Four other executives will also be charged. Samsung is now dissolving the corporate strategy unit that engineered the internal merger, an action that should loosen central (ie. Lee family) control and allow its affiliates to act more independently in future. Fortune

• Takata Pleads Guilty, Will Pay $1 Billion

Takata pleaded guilty to charges of criminal wrongdoing and will pay $1 billion in penalties, drawing a line under a scandal over faulty airbags that cost at least 11 lives and caused the biggest auto recall in U.S. history. Of the total amount, $850 million will go to automakers to help them with the costs of the recall, and $125 million to consumers. Civil cases alleging that automakers suppressed or failed to act on knowledge of the problem with Takata’s airbag inflators are still continuing. Fortune

Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;

@geoffreytsmith