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A Winter Storm Looms for China’s Tech Sector
Article

A Winter Storm Looms for China’s Tech Sector

Qu Yunxu, Chen Mengfan, Ye Zhanqi and Han Wei
Caixin, 2019
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Recommendation

In 2018, China’s once fast-growing technology sector experienced something unusual: a dearth of investment. Writing for Chinese business magazine Caixin, Qu Yunxu, Chen Mengfan, Ye Zhanqi and Han Wei lay out some of the reasons why fortunes have turned in one of China’s major industries. Investors and tech industry insiders will benefit from their in-depth analysis.

Summary

Growth in China’s technology sector is slowing down. In 2018, share prices for more than 70% of Chinese tech companies fell below their initial public offering price at the Hong Kong stock exchange. Shares traded in New York fared only slightly better. Another indicator that China’s tech sector is entering a rocky period are job cuts across the industry. The popular Chinese question-and-answer website Zhihu, for example, cut 100 jobs in 2018 despite raising $270 million in additional financing. Meanwhile, industry leaders such as Alibaba, JD.com, Tencent, Baidu and Xiaomi have announced restructuring plans that also include...

About the Authors

Qu Yunxu, Chen Mengfan, Ye Zhanqi and Han Wei are reporters for Chinese business magazine Caixin. 

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