Investors were floored when China started cracking down on homegrown tech giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in late 2020. They shouldn't have been, argues Kendra Schaefer, an expert on Chinese tech policy with Beijing-based Trivium China. For almost 20 years, the Chinese Communist Party has struggled to understand how its sprawling internet and financial technology industry fit with a socialist market economy, and things finally boiled over two years ago, Schaefer says. Increasingly, Chinese leader Xi Jinping and his party want technology firms to meet "state-directed goals," she says.

In this special edition from the Bloomberg New Economy Forum in Singapore, we dive into the complexities of Chinese economic policy. One of the more recent challenges for investors and foreign businesses operating in China is a lack of good intelligence, Schaefer tells host Stephanie Flanders. There's been an "exodus" of Chinese policy experts since the pandemic began, she says, partly because of restrictions on travel inside the country. Schaefer herself recently relocated to the US from Beijing.

For now, many foreign companies have been confused by recent aggressive moves out of Beijing and powerless to do much about it. While investors were befuddled by new regulations on China's big tech firms, behind the scenes the country was increasingly uneasy with their power and apparent lack of interest in Communist Party objectives. Instead of "disrupting pizza delivery," tech giants should focus more on developing high-end computer chips, Schaefer says, citing the opinion of party leaders. 

Meantime, manufacturers have seen production grind to a halt at the slightest spread of Covid-19. For sure, some companies have talked about mitigating risk and diversifying outside of China. However, leaving altogether is hardly an option for many. Duplicating the country's supply chain would take 10 years, so "people are just doing their best to hedge their bets," Schaefer says.

Investors were floored when China started cracking down on homegrown tech giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in late 2020. They shouldn't have been, argues Kendra Schaefer, an expert on Chinese tech policy with Beijing-based Trivium China. For almost 20 years, the Chinese Communist Party has struggled to understand how its sprawling internet and financial technology industry fit with a socialist market economy, and things finally boiled over two years ago, Schaefer says. Increasingly, Chinese leader Xi Jinping and his party want technology firms to meet "state-directed goals," she says.
In this special edition from the Bloomberg New Economy Forum in Singapore, we dive into the complexities of Chinese economic policy. One of the more recent challenges for investors and foreign businesses operating in China is a lack of good intelligence, Schaefer tells host Stephanie Flanders. There's been an "exodus" of Chinese policy experts since the pandemic began, she says, partly because of restrictions on travel inside the country. Schaefer herself recently relocated to the US from Beijing.
For now, many foreign companies have been confused by recent aggressive moves out of Beijing and powerless to do much about it. While investors were befuddled by new regulations on China's big tech firms, behind the scenes the country was increasingly uneasy with their power and apparent lack of interest in Communist Party objectives. Instead of "disrupting pizza delivery," tech giants should focus more on developing high-end computer chips, Schaefer says, citing the opinion of party leaders. 
Meantime, manufacturers have seen production grind to a halt at the slightest spread of Covid-19. For sure, some companies have talked about mitigating risk and diversifying outside of China. However, leaving altogether is hardly an option for many. Duplicating the country's supply chain would take 10 years, so "people are just doing their best to hedge their bets," Schaefer says.

How will countries around the world cope with persistent inflation and high borrowing costs? Are central bankers helping to abate the cost-of-living crisis or are they moving us all closer to recession? On Stephanomics, a podcast hosted by Bloomberg Economics head Stephanie Flanders—the former BBC economics editor and chief market strategist for Europe at JPMorgan Asset Management—we combine reports from Bloomberg journalists around the world and conversations with internationally respected experts on these and other issues to bring the global economy to life. 

How will countries around the world cope with persistent inflation and high borrowing costs? Are central bankers helping to abate the cost-of-living crisis or are they moving us all closer to recession? On Stephanomics, a podcast hosted by Bloomberg Economics head Stephanie Flanders—the former BBC economics editor and chief market strategist for Europe at JPMorgan Asset Management—we combine reports from Bloomberg journalists around the world and conversations with internationally respected experts on these and other issues to bring the global economy to life.

Who will win the trade war, and how? If the job market is so strong, why does your paycheck seem so meager? What will drive the economy of the future? Stephanomics, a podcast hosted by Bloomberg Economics head Stephanie Flanders, will take listeners on location each week to answer questions like these and bring the global economy to life.

Stephanomics

Confusion Reigns for Foreign Companies Operating in China

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/d58ce141-a7a4-49b0-a2b0-af4f0101e201/transcript

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