China’s crackdown on its tech sector in the past few years might have loosened, but the fallout is still hurting its development after the government has loosed its grip, says business analyst Shaun Rein to AP. “The crackdown was deep and cut far to the bone, probably more than the government expected it to,” said Shaun Rein,
“The crackdown was deep and cut far to the bone, probably more than the government expected it to,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Because what’s happened is over the last two years, venture capitalists and entrepreneurs have been scared to deploy capital and start new companies.”
The value of venture capital deals in China plunged 44% to $62.1 billion in the first 10 months of 2022 compared to the same period in 2021, according to research firm Preqin.
Some entrepreneurs and venture capitalists are taking a wait-and-see attitude, “worried in the long term that if they invest in a hot sector that the government that goes against China’s agenda or doesn’t fit with the government’s agenda for the private sector that they might get wiped out,” Rein said.
Well-established internet companies are still at an advantage to other tech industries in China that face added uncertainty due to friction between Washington and Beijing over advanced technology and trade as the U.S. seeks to block exports of high-end semiconductors and chip-making equipment and to limit Western dealings with companies like Huawei Technologies, the world’s largest maker of telecommunications networking gear.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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