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January 5, 2022 04:05 pm

As Beijing Takes Control, Chinese Tech Companies Lose Jobs and Hope

The crackdown is killing the entrepreneurial drive that made China a tech power and destroying jobs that used to attract the country's brightest. From a report: Like many ambitious young Chinese, Zhao Junfeng studied hard in college and graduate school so he could land a coveted job as a programmer at a big Chinese internet company. After finishing graduate school in 2019, he joined an e-commerce company in the eastern Chinese city of Nanjing, got married and adopted a cat named Mango. In November of 2021, he moved to Shanghai to join one of China's biggest video platforms, iQiyi. He was on track to achieve a much-desired middle-class life, documenting his rise on his social media account. Then barely a month into his new job, he was let go when iQiyi laid off more than 20 percent of its staff. The ranks of the unemployed technology workers are swelling, as China's once vibrant internet industry is hit by a harsh and capricious regulatory crackdown. Under the direction of China's top leader, Xi Jinping, the government's unbridled hand is meddling in big ways and small, leaving companies second-guessing their strategies and praying to not become the next targets for crackdown. In place of the pride and ambition that dominated a few years ago, fear and gloom now rule as many tech companies lower their growth targets and lay off young, well-educated workers. Like their American counterparts, China's biggest tech companies are regulated to limit abuses of power and to mitigate systemic risks. But Beijing's hyper-political approach shows that it's more about the Communist Party taking control of the industry than about leveling the playing field. The crackdown is killing the innovation, creativity and entrepreneurial spirit that made China a tech power in the past decade. It is destroying companies, profits and jobs that used to attract China's best and brightest. Even people within the system are alarmed by the heavy-handed approach. The former head of China's sovereign wealth fund urged restrictions on the power of regulators. Hu Xijin, the newly retired editor of the official newspaper Global Times and an infamous propagandist, said he hoped that regulatory actions should help make most companies healthier instead of leaving them "dying on the operating table." The damage has been done. Some internet companies have been forced to shut down, while others are suffering from huge losses or disappointing earnings. Many publicly listed companies have seen their share prices fall by half, if not more.

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