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 guide on decoding the logic and patterns behind China’s tech laws.
We talked about how the Chinese language authorities virtually all the time swings backwards and forwards between regulating tech an excessive amount of and never sufficient, how native governments have gone to nice lengths to guard native tech corporations, and why AI corporations in China are receiving extra authorities goodwill than different sectors right this moment.
To study extra about Zhang’s fascinating interpretation of the tech laws in China, learn my story revealed right this moment.
On this publication, I need to present you a very attention-grabbing 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 right this moment.
The capital markets, perpetually betting on whether or not tech corporations are going to fare higher or worse, are all the time searching for coverage alerts on whether or not China goes to begin a brand new crackdown on sure applied sciences. Because of this, they typically overreact to each transfer by the Chinese language authorities.
Zhang: “Traders are already very nervous. They see any type of regulatory sign very negatively, which is what occurred final December when a gaming regulator despatched out a draft proposal to manage and curb gaming actions. It simply spooked the market. I imply, truly, that draft legislation is nothing significantly uncommon. It’s fairly just like the earlier draft circulated among the many attorneys, and there are only a couple of provisions that want just a little little bit of readability. However traders have been simply so panicked.”
That particular instance noticed practically $80 billion wiped from the market worth of China’s two prime gaming corporations. The drastic response truly compelled China’s tech regulators to briefly shelve the draft legislation to quell market pessimism.
Zhang: For those who take a look at earlier crackdowns, the most important [damage] that these corporations obtain shouldn’t be within the type of a financial wonderful. It’s within the type of the [changing] market sentiment.
