So I used to be impressed after speaking to Angela Huyue Zhang, a legislation professor in Hong Kong who’s coming to show on the College of Southern California this fall, about her new ebook on decoding the logic and patterns behind China’s tech rules.
We talked about how the Chinese language authorities virtually all the time swings forwards and backwards between regulating tech an excessive amount of and never sufficient, how native governments have gone to nice lengths to guard native tech firms, and why AI firms in China are receiving extra authorities goodwill than different sectors immediately.
To be taught extra about Zhang’s fascinating interpretation of the tech rules in China, learn my story printed immediately.
On this e-newsletter, I need to present you a very fascinating a part of the dialog we had, the place Zhang expanded on how market overreactions to Chinese language tech insurance policies have turn into an integral a part of the tech regulator’s toolbox immediately.
The capital markets, perpetually betting on whether or not tech firms are going to fare higher or worse, are all the time on the lookout for coverage alerts on whether or not China goes to start out a brand new crackdown on sure applied sciences. In consequence, they typically overreact to each transfer by the Chinese language authorities.
Zhang: “Traders are already very nervous. They see any kind of regulatory sign very negatively, which is what occurred final December when a gaming regulator despatched out a draft proposal to control and curb gaming actions. It simply spooked the market. I imply, truly, that draft legislation is nothing notably uncommon. It’s fairly just like the earlier draft circulated among the many legal professionals, and there are only a couple of provisions that want somewhat little bit of readability. However buyers have been simply so panicked.”
That particular instance noticed almost $80 billion wiped from the market worth of China’s two prime gaming firms. The drastic response truly compelled China’s tech regulators to quickly shelve the draft legislation to quell market pessimism.
Zhang: Should you take a look at earlier crackdowns, the largest [damage] that these corporations obtain isn’t within the type of a financial wonderful. It’s within the type of the [changing] market sentiment.
