Chinese tech CEOs slip behind the scenes to avoid Beijing glare
Beijing – Bytedance founder Zhang Yiming, the mastermind behind TikTok, said he prefers “daydreaming” as he steps down as head of his own business earlier this month. But his departure comes as several of China’s once-hired tech entrepreneurs step down under the increasingly careful control of a government concerned about their growing power and influence.
In his deleted May 20 memo, Zhang admits his limitations as head of Bytedance – the Beijing-based parent of video-sharing app TikTok – and warned of the risks of the “CEO becoming too central.” and clutters the vision of what is to come.
However, his hasty departure comes as rumors of a mega-list swirl around his company, the world’s most valuable tech startup, which is absorbing advertisers from its hundreds of millions of users of Douyin – the Chinese version of TikTok.
He joins a growing list of billionaire tech bosses who suddenly left – at least in public – long before their prime.
In March, Colin Huang, 40, chairman of e-commerce giant Pinduoduo, unexpectedly left his post to focus on philanthropy.
More famously, Jack Ma, 56, the billionaire founder of online giant Alibaba, has been virtually silent since last year, when he berated Chinese regulators for stifling innovation.
It was a costly decision.
Shortly after his comments, the world record IPO of Hong Kong and Shanghai, Alibaba subsidiary, Ant Group, were summarily withdrawn days before the launch, Ma disappeared from the public and his company was fined an unprecedented $ 2.8 billion for “monopoly” practices.
Fear of the Communist Party
Having for years been hailed as the pinnacle of the country’s conquering entrepreneurial spirit, China’s tech leaders have started to feel the hand of the ruling Communist Party as it increasingly cares about their growing power and control. daring to get out of the line.
“The crackdown is not driven so much by concerns about the growing charisma and popularity of individual CEOs,” said Xin Sun, senior lecturer in Chinese and East Asian affairs at King’s College London.
But even more “out of the Communist Party’s fear of losing its grip on these resource- and data-rich tech giants who have become powerful players not only in the economy but also, at least potentially, in politics.
Ma’s name – once proudly paraded around the world as a champion of Chinese technology – is now being painted.
Last Monday, the Financial Times reported that he was set to step down as president of the business school he founded, days after a Weibo video showed the brand. He Hupan University in Hangzhou was repainted.
Zhang’s business also faced headwinds.
TikTok has been harangued by former US President Donald Trump as a data security risk for US users of the hugely popular app.
Inside China, Bytedance is one of dozens of tech companies that have been warned to “self-rectify” issues, especially around privacy and market dominance before the state. cut down.
Zhang found himself having to walk a fine line between his national and global roles.
Tech CEOs need to “be sensitive at all times to the political climate in the country, where the top political leadership is on a particular sector or issue, and many prefer to keep a low profile because of that,” said Paul Triolo. of the Eurasia group.
But “being perceived as too close to Beijing can be a handicap for companies with international ambitions,” he added.
Putting technology to the test in China is also more than just an authoritarian reflex, said Rui Ma, technology investor and host of the TechBuzz China podcast.
“I don’t think that ‘puts them in their place’,” she added.
“This is an effort to update regulations to meet global standards” in markets that have been loosely organized by the state but are capturing the attention of hundreds of millions of people. consumers.
As Facebook and Amazon push back against criticism of monopoly, tax evasion, and excessive influence in the U.S. open market, China is keen to create a different model.
Pruning monopolies should also allow innovative small businesses to thrive, Ma added.
The conundrum for China’s tech leaders is that skyrocketing growth, along with the data and financial might it incubates, is moving into government territory.
Their magnitude results in “economic, social and political consequences that are not yet fully predictable, which inevitably upsets the political elites,” said Xin Sun.
“Many (tech CEOs) have chosen to retire early and, more importantly, dilute the ownership and control rights they hold over companies to avoid being personally targeted by the plan.”
For Zhang of Bytedance, who hands over the reins to roommate and co-founder of Liang Rubo University, the message to the public was that a step back now means a strategic fulcrum in the future.
“Progress forces us to break inertia and keep exploring,” he said.
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