China’s regulatory crackdown is good news for startups aligned with CCP goals
Watching the Chinese technology sector over the last week has been a fascinating exercise. The Chinese government took on entire industries like edtech while also coming down on individual companies (Tencent, Meituan) in a broad effort to change the country’s technology landscape.
The sum of the financial damage is easy to understand. The NASDAQ Golden Dragon China Index, for example, which tracks U.S.-listed companies that do their business in China, fell from a 52-week high set earlier this year of 20,893.02 to 10,672.37 yesterday. You can also track the decline in value of various Chinese technology companies both on-shore and on foreign exchanges if you want to get an even fuller picture of the financial carnage.
It’s common among commentators and analysts to draw a direct line between the blocked Ant Group IPO last year, the ensuing fall from grace of Chinese entrepreneur Jack Ma, and the latest news out of the Chinese Communist Party’s (CCP) regulatory bodies. That’s reasonable. Things are changing in China, and the regulatory landscape of tech work in the country won’t be the same from here on out.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
We’ve explored the moment a little, noting last week that edtech investment could slow in the country provided that the government went through with its plan to force tutoring companies to go nonprofit. The government then did so, and more, also blocking tutoring companies from being formed, going public, raising external capital from foreign sources and more. It was comprehensive. Natasha Mascarenhas has a great read on the matter here.
So, bad news for startups? After all, if edtech investment could slow in the face of regulatory changes, what about other technology-influenced areas of business?
The negative case is somewhat easy to make. The positive case is more interesting. Some market watchers are making the argument that by taking on some of China’s largest technology companies, more room could be cleared in the country for smaller companies to snag a piece of business.
But central planning will tilt business away from certain areas of investment Alex Wilhelm 7 hours Watching the Chinese technology sector over the last week has been a fascinating exercise. The Chinese government took on entire industries like edtech while also coming down on individual companies (Tencent, Meituan) in a…
Recent Posts
- The best deal from Amazon’s Big Spring Sale is a free 65-inch 4K TV from Samsung
- 1200TB SSD modules are in the pipeline thanks to Pure Storage — but you definitely won’t be able to plug one in your workstation PC and it will be shockingly expensive
- The iPhone 16 could come with extra RAM and storage – just for AI
- ‘Spirited Away’ returns to theaters in April for Studio Ghibli Fest 2024
- Where to preorder Elden Ring: Shadow of the Erdtree (and what’s included)
Archives
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- December 2011