As China looks to reignite growth, what role will its technology industry play? And is there enough capital flowing to support a new generation of tech startups that could keep China competitive?
It’s not a secret that the Chinese economy slowed in recent quarters, thanks to global macroeconomic turbulence, geopolitical matters and the country’s now-fading zero-COVID policies. The policies, which China’s government is presently dismantling, resulted in frequent lockdowns in the populous nation’s cities, while other precepts of the policy disrupted trade and transit.
The zero-COVID policies worked to limit the spread of the pandemic in the country for some time, but the cost of the policy — in human and economic terms — appears steep today as the nation begins to endure a wave of infections that were perhaps delayed instead of avoided.
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Other factors played into China’s slowing economic growth. The country’s highly leveraged real estate market has taken blows thanks to changing regulations and a history of debt-fueled expansion, the price of which eventually came due. And China’s government cracked down on its domestic tech industry starting in late 2020 with the scuppering of Ant’s then-planned epic fintech IPO.
After Ant was put into the penalty box, a host of other regulations rained down from the Chinese Communist Party’s pen, whacking gaming, e-commerce and edtech, among other technology subsectors. Unsurprisingly, venture capital activity in the country declined.