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Angela Huyue Zhang
Says More…

This week in Say More, PS talks with Angela Huyue Zhang, Associate Professor of Law and Director of the Philip K. H. Center for Chinese Law at the University of Hong Kong, and the author of High Wire: How China Regulates Big Tech and Governs its Economy.

Project Syndicate: In 2020, Chinese regulators launched a crackdown on tech companies – a process that cost firms more than $1 trillion in market value. How has the crackdown changed the innovation and entrepreneurial culture in China? Has it had any positive effects?

Angela Huyue Zhang: The crackdown appears to have yielded few, if any, positive outcomes. Beyond failing to encourage new market entrants, it seems to have entrenched the dominance of incumbents. Moreover, it has severely undermined investor confidence, leading to a substantial reduction in capital flows into the consumer-tech sector.

As private entities recede, the state advances. For example, government-backed funds or companies acquire stakes in key subsidiaries of tech giants; these “golden shares” enable the government to exert more control over content moderation and other business decisions. Finally, the crackdown has enabled the state to steer investment within the technology sector, leading both private and state-backed investors increasingly to focus on so-called hard tech.