Chinese tech tycoons’ retreat spurs speculation about true motives amid controversies and Big Tech crackdown
- JD.com’s Richard Liu recently joined the founders of ByteDance and Pinduoduo in stepping aside from day-to-day management
- Some analysts say the entrepreneurs may really want to pursue other interests, but a government crackdown and controversies cloud the tech industry
As the biggest names in China’s technology sector continue to retreat from the front lines of running their companies, speculation remains about their true motives and how much power they are really relinquishing.
Each of these founders are part of a new generation of Chinese billionaires who built their fortunes during the rise of the country’s internet economy over the past two decades.
Unlike their counterparts in the West, however, the entrepreneurs are retreating from leadership roles while still relatively young, as Beijing has carried out a prolonged crackdown on the tech sector this year in a push to align business with national interests, and called on the wealthy to contribute to the country’s “common prosperity”.
“Now many are no longer so sure and likely opted to keep a much lower profile or even exit the China business scene entirely,” he added.
In their farewell letters, though, the entrepreneurs all cited other interests and personal reasons for retreating from their leadership roles.
Two months later, Zhang also said he would step aside this year to spend more time pursuing his passions and digging into the latest technological developments.
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Edward Tse, founder and chief executive of Gao Feng Advisory Company, said there is likely some truth to these stated intentions.
“After years of hard work, the time for harvest has finally come for many tech founders,” Tse said. “They have money to spend on their own areas of interest and they feel the companies’ development is on the right track.”
Still, many founders are stepping aside after recent controversies involving their companies and a national backlash against Big Tech dominance and work culture.
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However, staying out of the spotlight is not likely to help the entrepreneurs avoid Beijing’s increased scrutiny of their companies, according to Feng Chucheng, a partner at research firm Plenum.
“The party’s concern over cybersecurity, data security and tech independence is paramount,” he said.
Cameron Johnson, an adjunct faculty instructor at New York University and a partner at Shanghai-based Tidal Wave Solutions, said being “famous” or “high-profile” has not benefited China’s tycoons over the last two years, as the country’s regulatory and social environment underwent rapid change under a more proactive government.
At the same time, tech tycoons are not completely leaving their companies behind and still retain significant ownership stakes.
“It’s clear that regardless of what title a founder has, they are still controlling the company,” Johnson said. “The power and decision making is still with the founder.”
Additional reporting by Josh Ye and Coco Feng.