The China Model: What the Country’s Tech Crackdown Is Really About
After spending years emulating Silicon Valley, the world’s second-biggest economy is now officially charting its own course.
Employees at Hello Inc. headquarters in Shanghai on April 26, shortly after the company confidentially filed for a U.S. initial public offering.
Photo illustration: 731: Photo: BloombergOn the fourth floor of a harborside mall on Grand Cayman, not far from touristy scuba-diving outlets and a jerk-chicken shack, is the offshored home of ride-hailing company DiDi Global Inc., one of China’s biggest technology firms. A few doors down are the internet companies Baidu Inc. and Meituan; Alibaba Group Holding Ltd. is registered at a P.O. box up the street, right across from Singh’s Roti Shop & Bar.
The Caribbean footholds, essentially leased mailing addresses, have no operational value but have made it easier for Chinese unicorns to attract European and American investors. They’ve been a bridge between East and West, a sunny symbol of the freewheeling capitalism tolerated by the Chinese Communist Party (CCP) as the cost of allowing its homegrown juggernauts to compete with their U.S. counterparts. DiDi’s presence there was needed for it to go public on the New York Stock Exchange on June 30. Chinese companies saw multiple benefits to gaining access to the U.S. When DiDi opened a research campus in California in 2017, founder and Chief Executive Officer Cheng Wei gushed about the company’s “new home ... alongside the greatest technology companies in the world.” Together, they were embarking on a “great journey.”