title: Why China crushed its tech giants
body: China's ban on all cryptocurrency transactions, announced on Friday, is just the latest of a series of bombshells that over just one year have profoundly reshaped the country's technological landscape. It is not only bitcoin miners, crypto-traders, or video gamers that have suddenly found themselves in Beijing's crosshairs. By and large it is China's largest internet platforms that have been feeling the heat. One after another, tech giants like Ant, Meituan, and Didi have been targets of antitrust probes. This has intersected with a tightening of data protection regulation, which is seen as a national security issue, and a general drive to curb capitalist excess. Ride-hailing firm Didi, for instance, hasn’t just come under antitrust scrutiny: two days after its New York IPO in June, it was forced to stop accepting new users while regulators investigated suspicions it might leak user data to the US.
  Just a few years ago, China’s technology companies used to seem immune to regulation. Their CEOs were idolised. Almost every STEM student in China wanted to work in consumer tech, not hardware. The government favoured these companies, which never would have gotten so big without it. They were allowed to grow in a nurturing policy environment with no competition from overseas tech giants, enjoying what Tiffany Wong, a consultant at China-focused research firm Sinolytics, calls an “experimental Wild West period of growth”.
  Like some of their counterparts elsewhere in the world, Chinese tech giants exploited legal grey areas. They maintained a work culture where white-collar employees stayed in the office until the early morning, and worked over national holidays. They designed algorithms that pressured delivery workers to drive dangerously and also fined them arbitrarily. They deliberately misclassified their workers, using intermediaries to hire them, to avoid legal responsibility for paying social security for drivers. Workers who attempted to fight legal cases found that they were in fact employed not by the platform, but by a company in a city they’d never worked in. When a driver for food delivery giant Ele.me died on the job, the company maintained it had no labour contract with him, and paid his family the equivalent of £220 as compensation.
  Bad practices and minimal regulation continued in the name of economic growth and innovation. Tech companies hired former regulatory officials, which contributed to regulation’s ineffectiveness. Even when regulators tried to govern new consumer tech, for instance, by releasing the E-Commerce Law in 2019, tech companies successfully lobbied for softer guidelines. Since the outbreak of Covid-19, these companies have continued to grow, and Chinese consumers have become even more reliant on them, but also more aware of their ugliest practices.