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Foreign Firms Based In Technology Strolling Out Of China

ByMike Paul

Dec 3, 2021

Currently, there is a growing demand for technology-driven outlets. Most platforms are now developed digitally and have made a name for themselves attributable to technological advances. The digital world has expanded its horizons and continues to be a treasure trove of top digital competitors, including a diverse range of companies, gaming, and other services. There certainly is no shortage of digital outlets, but there are certain guidelines and regulations that each outlet has to undergo. Failure to do so will make it more difficult for the outlets to thrive. The recent shutdown of several well-known companies in China has caused quite a stir. Several businesses in various niches have made this decision due to the uncertainty of stability.

Which foreign technology companies have recently downsized operations or left China?

China has imposed a stringent law governing its policies toward foreign companies operating in the nation. There have been limitations placed on the quantity of data that companies can store and the criteria for collecting data. This has resulted in a downturn in market profit for several foreign outlets, prompting them to withdraw their operations in China.

  • The Yahoo corporation stands out among the different outlets that have closed their doors in the country and have garnered the most interest. The corporation has ceased operations in all areas of China, which has been in effect since November 1, 2021. The content has not been updated, and the services have been permanently suspended.
  • Following Yahoo, the most popular platform among professionals is LinkedIn, owned by Microsoft and focuses on social networking. Since the regulatory laws were passed out, it no longer runs its version in China, and any social networking activity on the site has been permanently suspended.
  • Likewise, plenty of other well-known firms have discontinued offering any service, citing the various implications they face due to the stringent restrictions in place.

Why are companies leaving China now?

The main reason for the suspension of services by numerous enterprises and firms in China is the law governing data protection. The law is known as the “Personal Information Protection Law,” It has been in effect in the country beginning November 1, 2021. According to the newly enacted regulation, companies are required to prioritize consumers’ consent before gathering any data or information. Apart from that, if a user chooses to opt-out, there must be a means to stop providing their data. Also, further regulations have been a big cause of worry for many outlets, particularly those belonging to foreign countries. Furthermore, if one is found guilty of breaching any set regulations, a substantial fine may be imposed, which is a red flag for any business. As a result, several enterprises, mostly from the United States, have discontinued their services.

What other hurdles do foreign tech companies face in China?

China is prominent for its laws and regulations, wherein laws hold the power to constrain any form of censorship. It certainly has a say in what is regarded right and wrong in the nation, which is an odd way of running things. This has been a significant loss for technologically driven platforms, and there have been objections to the legislation from various foreign corporations, resulting in a higher danger of substantial loss.

What does this mean for internet users in China?

Alternatives based in China abound to companies that have garnered global renown. Companies like Facebook have been barred from China’s official web portal, “Greatwall Fire.” This is due to censorship restrictions, including those imposed on the words used on social networking sites. For example, Google does not operate in China; nonetheless, Baidu, a suitable alternative, is very popular among Chinese internet users. There are also texting apps available, specifically for Chinese users, that are only useable in China.

In comparison to other countries, China, however, does not have as many social networking outlets. Due to the ban on international networking outlets, there are fewer options. Furthermore, the rigid norms that China-owned websites follow to have their own set of drawbacks.

Mike Paul

Mike was one of the founding members of DMR, he was a pivotal figure in the early stages of DMR. Mike has since left the team to pursue his career in software development.