What China Expects From Businesses: Total Surrender
Unlike regulators in Europe and the U.S., Beijing is using the guise of antitrust to bring powerful tech companies into line with its priorities.
By Li Yuan, The New York Times (NYT)
July 19, 2021
When Pony Ma, head of the Chinese internet powerhouse Tencent, attended a group meeting with Premier Li Keqiang in 2014, he complained that many local governments had banned ride-sharing apps installed on smartphones.
Mr. Li immediately told a few ministers to investigate the matter and report back to him. He then turned to Mr. Ma and said, “Your example vividly demonstrates the need to improve the relationship between the government and the market.”
By then Tencent had invested $45 million in a ride-sharing start-up called Didi Chuxing, which later became a model in the government’s push to digitize and modernize traditional industries. When President Xi Jinping met with global tech leaders in Seattle in 2015, Didi’s founder, Cheng Wei, then 32 years old, joined Jeff Bezos of Amazon, Apple’s Tim Cook and Mr. Ma at the gathering.
But the relationship between Beijing and the tech sector has splintered badly in the past year. Didi is now a target of the government’s regulatory wrath. Days after the company’s initial public offering in New York last month, Chinese regulators pulled its apps from app stores on the grounds of protecting national data security and public interests.
At the heart of the Didi fiasco, and to a large extent China’s increasingly aggressive antitrust campaign, is the question of what Beijing expects from private enterprises. The answer is a lot more complicated than in the United States or Europe...
... it’s important to keep in mind that the Chinese tech companies operate in a country ruled by an increasingly autocratic government that demands the private sector surrender with absolute loyalty...
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