Welcome back to TechCrunchs China Roundup! This digest contains the most recent developments in China's tech landscape, and what these mean for people around the globe.
The #MeToo movement in China has been sparked by a sexual assault case against Alibaba. According to industry observers, this case is a turning point in the fight against China's misogynist technology industry. Social media users aren't sure how to handle the public outrage against the internet giant.
Another story: More Chinese tech companies are delaying plans to go public overseas following Didis's dispute with Chinese regulators about its rushed IPO. This includes Tencents music streaming empire, and one of Chinas most-valuated autonomous driving startups.
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Last Sunday at midnight, an employee of Alibaba posted on the company's internal forum a detailed account of how her manager and a client sexually assaulted she on a business trip. After failing to get support from her superiors or human resources, she made the case public.
It quickly spread across China's social media platforms. People continued to blast Alibaba's ignorance, toxic business drink, and the pervasive objectifications of women in the Chinese technology industry. This has amounted to more than just the corporate world.
The alleged perpetrator was fired by Alibaba on August 9th. Two of the alleged perpetrators were fired and the head of HR at the firm was issued a disciplinary warning.
This #MeToo case is undoubtedly the most prominent and significant to a Chinese tech company. It has prompted the most difficult response from the company. Alibaba is creating company policies to prevent sexual assaults. This surprise surprises many, as the tech giant has such policies in place.
Social media helped to bring the case to a large public attention in China. It seemed that the discussion about the incident was spreading organically on Weibo (in which Alibaba holds a majority stake), within a matter of hours.
People soon realized that the case was not as severe as it seemed. It took several days for the case to reach the top of Weibos' trending charts, which is a sign of the most popular topic on the Chinese internet. This is a recall of Weibos' censorship last year of Jiang Fan, an Alibaba executive.
Talang Qingnian (roughly Surfing Youth), is a social media column for the state newspaper Peoples Daily. It was blasted in an Article:
There was suspicion that Alibaba may have manipulated public discourse because of the slow building of discussion. Since the Jiang Fan trial, China has maintained that the media must be independent of capital. Weibo is the core infrastructure of truthful news in China. Any stakeholder should not use it to manipulate public opinion.
Although the article caused more public outrage, it was quickly removed. This was likely due to its strong language. China's state media apparatus is huge and only a handful of outlets like Xinhua can consistently relay official opinions from top-level Chinese leaders. It is not unusual for less authoritative publications to retract reports that have caused backlashes. A state-affiliated economic newspaper published an article last week calling video games spiritual opioids. This was a loaded title that had previously sunk the stock prices of Tencent, NetEase and other companies. The article was republished with a more gentle tone.
Smaller war chests
Chinese companies looking to list overseas have always flagged regulatory uncertainties as a risk, but foreign investors had to decide if they were worth the investment. However, China's recent regulatory assault on its tech darlings has been a deterrent to Chinese companies pursuing their IPO dream.
According to reports, NetEase Music and Pony.ai have rescheduled their New York and Hong Kong listing plans.
Beijing is now more wary of U.S. regulators scrutinizing data-rich Chinese companies. The U.S. securities regulator stated last month that Chinese companies wishing to raise capital in America must disclose information about their legal structure as well as the possibility of Beijing interfering in their business.
Many Chinese tech companies have taken lessons from Didis's fallout with the government. The government had previously told Didi to delay listing the company until it has a data protection plan in place. Didi, however, went ahead and triggered a government probe into Didi's data practices. The government then threw its shares away, which now trade at $8 per share, as opposed to $16 when Didi was launched in early July.
According to Financial Times, Beijing's crackdown on the consumer tech sector has had a devastating effect on all major players. It has wiped out as much as $87 Billion from the net worth of Chinas tech billionaires. This includes Pony Ma of Tencent, and Colin Huang of Pinduoduo. Future entrepreneurs will know where to allocate their energy. The government is keen on hard tech such as semiconductors and clean technology. The new generation is now listening.
