Chinese IT entrepreneurs want to “de-China” amid US-China tensions. As a result, the Chinese tech entrepreneur’s U.S. expansion is growing harder.
Before 2019, Chinese companies in the U.S. faced a few substantial obstacles. However, after Washington sanctioned Huawei (HWT.UL), numerous Chinese enterprises set their headquarters abroad to avoid U.S. government scrutiny.
Some mainland China I.T. business owners argue they need permanent residency or citizenship abroad to evade U.S. restrictions and biases against Chinese companies.
Shenzhen-based Ryan, who didn’t reveal his family name for fear of repercussions in China, thinks his three-year-old software firm is ready to grow into the world’s largest economy. His company has a million East Asian users and a strong North American base.
He’s disappointed by the U.S.-China trade war and U.S. politicians’ limitations on a rising number of Chinese enterprises.
“It’s very unfair,” he remarked, stressing that foreign competitors didn’t encounter similar obstacles when expanding into the U.S.
“We feel like the filling between biscuits.” His answer? He wants Asian citizenship.
Reuters interviewed seven mainland Chinese I.T. entrepreneurs, most of whom were educated abroad, who want to expand to the U.S. However, most want to become permanent residents or citizens in Hong Kong, Canada, Japan, the U.S., or Singapore.
Three of the seven businesspeople agreed to be recognized only by their English first names, but the others wanted complete anonymity, citing concerns about Chinese repercussions. They also want anonymity for their enterprises.
As both countries compete for global tech supremacy, U.S.-China hostilities have persisted under President Joe Biden.
Due to chip export restrictions and data security concerns, byteDance-owned TikTok has been prohibited on U.S. government devices and in Montana. In addition, Hina has restricted foreign consultancies and due diligence firms and banned Micron Technology (MU.O) products from vital industries.
Entrepreneurs and advisors say geopolitical concerns have made the U.S. less welcoming for mainland Chinese enterprises seeking investment or operations.
“The political narrative in Washington DC and many state capitals is based on the misconception that all Chinese companies are intertwined with and taking direction from the Chinese government and Chinese Communist Party,” says James McGregor, chairman for Greater China at U.S. communications consultancy APCO Worldwide.
The U.S. Commerce Department declined to comment on American perceptions of Chinese companies.
China’s foreign ministry claimed certain Western countries want to “politicize technology, putting up obstacles to regular technology and trade cooperation, which benefits neither side, and adversely affects global technological advancement and economic growth.”
Even though growth in the U.S. is harder, most entrepreneurs Reuters spoke to still want to do it. TBut, despite that focusing on the home market is unattractive despite its size.
From late 2020, a two-year regulatory crackdown on China’s once-freewheeling technology sector overlapped with draconian zero-COVID regulations during the epidemic, disillusioning them with Xi Jinping’s China.
“Everything changed during the pandemic,” said entrepreneur Wilson, who began seeking to move his software firm abroad after Xi won an unprecedented third term last year.
He claimed that while it was possible to do business in China, “it’s easier for my employees, for my shareholders, if I’m out.”
The State Council of Information Office (SCIO) and foreign ministry did not comment on certain businesspeople’s plans to leave China or their disenchantment with China.
Chris Pereira, the founder of Shenzhen-based business consultancy firm North American Ecosystem Institute, said companies increasingly want to rebase overseas and “de-China” their identities.
Shein, an online fast-fashion store, is a Singapore-based holding company. E-commerce company PDD Holdings relocated from Shanghai to Dublin in early May.
Shein and PDD did not comment.
Around 100 mainland companies have contacted Pereira’s firm this year for help expanding abroad. Pereira educates many on localizing overseas and integrating into a community rather than just disguising their Chinese identity.
The businesspeople doubted Beijing’s backing for private business owners and were concerned about civic freedoms. Some remarked that being ambitious in China typically requires building ties with the Chinese Communist Party, which they are reluctant to do.
After official censorship requests became too frequent and intrusive, Tommy, another Chinese entrepreneur, left abroad.
The SCIO declined to comment on how Chinese censorship affects enterprises.
Tommy is starting a new startup and wants to move to the U.S., even though U.S. customs officers questioned him about his U.S. bank account on a recent business trip.
U.S. Customs and Border Protection declined to comment.
Comment Template