China and the US are both grappling with the immense power of technology companies, but the Chinese government is prepared to play a far more active role, and the world’s two largest economies seem headed down different paths.
The authoritarian tinge is a risky pivot to some in and around the Chinese tech industry — and others see a chance for the country to gain an edge against its main geopolitical rival. “China is actually taking the lead in setting some boundaries around the power of bigtech,” says Thomas Tsao, co-founder of Gobi Partners, a venture capital firm based in Shanghai, speaking to Bloomberg. “People are missing the bigger picture. They’re trying a new model.”
If China is abandoning the Silicon Valley model, what will it replace it with? Insiders suggest it will be less founder-driven and more China-centric. US antitrust action often focuses on strengthening consumer protections, but China’s crackdown is ultimately geared toward protecting government policy.
Alicia García-Herrero, an economist in Hong Kong at Natixis, said to Bloomberg that neither Huawei nor ZTE, which together have a lock on the Chinese telecom networking market, have been targeted so far, likely because they maintain closer ties to government officials. “Full alignment with China’s leadership is a must to operate in China.”