Tech

What China Expects Companies: Total Surrender

When Pony Ma, head of China’s internet powerhouse Tencent, attended a group meeting with Prime Minister Li Keqiang in 2014, he complained that many local governments banned ride-sharing apps installed on smartphones. It was.

Lee immediately told several ministers to investigate the problem and report it to him.Then he turned to Mr. Ma Said, “Your example clearly demonstrates the need to improve government-market relations.”

By that time, Tencent had invested $ 45 million in a ride-sharing startup called Didi Chuxing. It later became a model for governments to drive the digitization and modernization of traditional industries.Xi Jinping President met In 2015, along with world-class tech leaders in Seattle, Diddy’s founder, Chen Wei, then 32, met with Amazon’s Jeff Bezos, Apple’s Tim Cook, and Ma.

However, Beijing’s tech sector relations have been severely disrupted over the past year. Diddy is currently the target of government regulatory rage.A few days after the company’s initial public offering in New York last month, Chinese regulators Pulled Apps from the app store because it protects national data security and the public interest.

At the heart of Didi’s blunder, much of China’s increasingly aggressive antitrust campaign is the question of what Beijing expects from the private sector. The answer is much more complicated than in the United States or Europe.

China’s big tech is about the same power As an American tech giant in the national economy.Like their American counterpart, Chinese companies seemed to be engaged Anti-competitive Practices that hurt consumers, merchants and small businesses. It deserves scrutiny and regulation to prevent abuse of power.

But it’s important to remember that Chinese tech companies are doing business in increasingly dominant countries. Dictatorship A government that requires the private sector to surrender with absolute loyalty. Therefore, unlike antitrust campaigns, European and American officials are pursuing In their area, China is strengthening the Communist Party’s monopoly on power under the guise of antitrust law. Private enterprises They can lose their independence and become just an adjunct to the nation.

Benjamin Kiu, a partner at Hong Kong law firm Robe & Robe, said the progress in Didi was equivalent to “shock therapy type enforcement.” “As a result, nationalization of data may be invalidated and state control may be strengthened.”

American And European Not surprisingly, those who are dissatisfied with the lack of laneing at Big Tech shouldn’t do that either. Impressed Depending on how quickly Beijing is hunting down tech giants. Like many in China, efficiency comes at the expense of law and due process.

Communist Party made it Sunny Last year, he said he needed “politically wise people” in the private sector who “listen to the party and follow the party.” The party said they should contribute more to the longevity of the Communist Party and help make China great again.

According to people in the tech industry, the message is that businesses need to prove useful and helpful in advancing government goals while avoiding trouble.

Didi did not listen to the message, these people said. They were surprised that Didi ignored some regulators’ opposition and rushed an IPO in the current regulatory environment.

For some government officials, Diddy’s listing in the United States is “Janfen Inway—Publicly compliant, but privately rebellious. The word choice is obvious because this phrase is often used to describe the betrayal of a boss by a subordinate.

“At these moments,’politically incorrect’ Internet companies only face a deadlock,” Internet consultant and investor Lee Chengdong wrote about Diddy in a social media post.

It is helpful for businesses to know Beijing’s priorities. Domestically, it is to reduce inequality and promote what the party calls “collective prosperity.” Internationally, it manages geopolitical tensions with the United States.

As China’s economic growth slows and opportunities diminish, China’s growing inequality is becoming a time bomb in the eyes of the party, delusional of social unrest and skepticism about its legitimacy. And tech companies are increasingly being blamed for the wealth gap, whose founders are being criticized as villains who use consumers to force employees to work long hours.

Beijing was dissatisfied last year when some of the big internet companies invested heavily in apps that sell vegetables to locals. This is because the app could replace moms and pop vegetable stands, where many low-income earners make a living.

Beijing also chased Ant group, A financial technology giant dominated by Jack Ma of Billionaire. This is because Ali believed that it made it too easy for young people to take out personal loans, increasing social dissatisfaction.

The government has also cracked down on the online education industry. Authorities believe that the online education industry can benefit from eliminating parental anxiety.As a result, the cost of raising children has increased in Beijing. New policy Encourage couples to have multiple children.

In April, a senior government official spent 12 hours as a meal courier for only about $ 6. It has sparked widespread debate about how online platforms have treated their workers badly.

According to Beijing-based venture capitalist, Tencent, Didi, and e-commerce giant Alibaba, known as the “platform” company, are now second-class citizens to the government. (He said top-tier companies are developing “real” technologies such as semiconductors and artificial intelligence that help China become technologically self-sufficient.) For the government, platforms have users, data, and capital. Too many. He said he had a lot of power.

In the last six months, tech giants and some star entrepreneurs have pledged allegiance and gestured with money and resignation. Tencent announced in April that it would spend $ 7.8 billion on green energy, education and village revitalization.

In April, four days after Mr. Nishi visited his alma mater, Tsinghua University in Beijing, Wang Xing, the founder of the food delivery company Meituan and a graduate of Tsinghua University, established a foundation at the university. In June, Mr. Wang donated more than $ 2 billion worth of shares to his foundation.

After two of his employees Died In March, Colin Huang, the founder of the e-commerce platform Pinduoduo, which has received a lot of criticism online, said he would resign to give way to the next generation. At the age of 41, he was named the second wealthiest person in China.

In May, Zhang Yiming, 38, the founder of TikTok’s parent company ByteDance, announced that he would also resign as CEO.A month later he Announcement A $ 77 million donation to set up an education foundation in his hometown. The Wall Street Journal He also reported that he shelved ByteDance’s IPO plan in March after meeting with regulators.

Tencent’s business unit said last month that employees need to leave the office by 6 pm Wednesday and 9 pm on other weekdays. ByteDance announced this month that it will abolish the requirement to work every other Saturday, which is common in many Chinese companies.

Similar announcements continued after the crackdown on Didi. JD.com, an e-commerce platform, announced on Tuesday that it will raise the average annual salary of its employees from 14 months to 16 months. On Friday, Lei Jun, the founder of smartphone maker Xiaomi, donated more than $ 2 billion worth of shares to the two foundations.

What do all these actions have to do with antitrust law and the restraint of Big Tech’s power? Not directly. But businesses and entrepreneurs are effectively telling governments that they know who their husbands are and at least need to do something that seems to reduce social inequality and dissatisfaction.

Another “sin” committed by Didi was that it was revealed in New York when geopolitical tensions between China and the United States increased and the two countries were vying for technological hegemony.

In China, backed by Western venture capital, there is growing concern that many New York-listed tech companies could become economic pawns if bilateral relations deteriorate.China Announcement Domestic tech companies will need to undergo cybersecurity inspections before listing their shares abroad, which will probably hinder most IPO plans.

“China needs to be prepared for the worst-case scenario,” Weibo user Xiong Weizhou commented on a validated Weibo account. “It could be a war with Taiwan or sanctions by the United States and Europe. Important Chinese companies shouldn’t be on the soft side of the country.”

What China Expects Companies: Total Surrender

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