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Caging the Tech Capitalists

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Caging the Tech Capitalists

How China built the bureaucracy it needed to crackdown on tech giants.

The Wire China,

5 min read
3 take-aways
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The Chinese government unleashed a regulatory strike on domestic technology companies. 

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Recommendation

Chinese leaders modeled their economy on the idea of a “birdcage,” an approach that sought to unleash the nation’s growth potential while controlling its trajectory through regulation and policy. Under this formula, China’s technology ecosystem flourished, but in recent years, officials have done an about-face, releasing a torrent of regulatory and legal proceedings. Journalist Ya-Wen Lei examines the 180-degree turn in policy relative to the technology industry, focusing on what it portends for Chinese innovation. Executives and investors will find this an insightful analysis of the Chinese tech landscape.

Summary

China built a “birdcage economy.”

From 1980 to 2010, Chinese leaders pursued a unique growth strategy to expand the economy through commerce and enterprise while using state governance to ensure that the Chinese Communist Party (CCP) controlled economic acceleration. Beginning in 2010, as leaders transitioned the birdcage economy into technology and high-growth industries, they sought to differentiate between “new and old birds.”

Officials celebrated new entities that promised technology growth. Old firms – those not facilitating innovation gains – found themselves shunned. By 2020, the strategy had created a thriving Chinese technology ecosystem. For example, three of China’s largest...

About the Author

Professor of sociology at Harvard University Ya-Wen Lei also wrote Gilded Cage: Technology, Development, and State Capitalism in China.

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