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China: LinkedIn and LinkedOut

Review of the Press on Tech:

In 2014, LinkedIn officially launched a Chinese beta version of its professional social network under the name Lingying (领英). LinkedIn hired Derek Shen, formally the founder and CEO of group buying website Nuomi, as the head of its mainland-focused operations.

When it launched there, in 2014, it had agreed to adhere to the requirements of the Chinese government in order to operate there, but also promised to be transparent about how it conducted business in the country and said it disagreed with government censorship.

On the Chinese desktop version of Linkedin, users will find Sina Weibo and Tencent Weibo options to import contacts.

It’s been more than seven years since LinkedIn launched a site in simplified Chinese, the written characters used on the mainland, to expand its reach in the country. It said at the time of the launch in early 2014 that expanding in China raised “difficult questions” because it required censoring content, but that it would be clear about how it conducts business in China and undertake “extensive measures” to protect members’ rights and data.

On October 14, 2021, Microsoft says it is shutting down its LinkedIn service in China later this year following tighter government censorship rules. The company said in a blog post Thursday, Oct. 14, 2021, it has faced “a significantly more challenging operating environment and greater compliance requirements in China.” 

LinkedIn senior vice-president Mohak Shroff blogged: “We’re facing a significantly more challenging operating environment and greater compliance requirements in China.”

And the firm said in a statement: “While we are going to sunset the localised version of LinkedIn in China later this year, we will continue to have a strong presence in China to drive our new strategy and are excited to launch the new InJobs app later this year.”

LinkedIn in March said it would pause new member sign-ups on LinkedIn China because of unspecified regulatory issues. China’s internet watchdog in May said it had found LinkedIn as well as Microsoft’s Bing search engine and about 100 other apps were engaged in improper collection and use of data and ordered them to fix the problem.

LinkedIn had been the only major Western social-media platform operating in China.

Microsoft, which is based in Redmond, Washington, bought LinkedIn in 2016. LinkedIn doesn’t disclose how much of its revenue comes from China, but it reports having more than 54 million members in mainland China, its third-largest user base after the U.S. and India.

Google pulled its search engine out of mainland China in 2010 after the government began monitoring search results and videos on YouTube. It later considered starting a censored Chinese search engine nicknamed Project Dragonfly but dropped the idea following internal protest in 2018.

Other U.S.-based social media platforms such as Facebook and Twitter are blocked within China.

Microsoft’s own search engine, Bing, was temporarily blocked in China in early 2019, leading the company’s president, Brad Smith, to reveal that executives sometimes have difficult negotiations with the Chinese government over censorship and other demands.

“We understand we don’t have the same legal freedom that we do in other countries, but at the same time, we stick to our guns,” Smith told Fox Business News in January 2019. “There are certain principles that we think it’s important to stand up for, and we’ll go at times into the negotiating room and the negotiations are sometimes pretty darn direct.”

Adding to the sensitivities this year was a massive hack of Microsoft’s Exchange email server software that U.S. officials have blamed on criminal hackers associated with the Chinese government.

Read more at: Microsoft shutting down LinkedIn app in China amid scrutiny


PALO ALTO, U.S. — Overseas investors scaled back venture capital deals in China in August as the country’s regulatory crackdown on the tech sector prompted many to rethink their approach.

The latest figures from market research company PitchBook represent a sharp break from earlier in the year.

Chinese startups have raised $32.6 billion from 634 deals that included foreign VCs this year as of Aug. 25, compared with $18.9 billion from 453 in the first eight months of 2020. So far in August, however, just $800 million has been raised from 67 deals with foreign participation, down from $4.7 billion in July.

While several days remain in August, $800 million would be a new low for the pandemic period, PitchBook data shows. The previous low of $900 million was in January 2020, when COVID-19 first hit China and the country began a monthslong lockdown.

A wide-ranging regulatory crackdown that unfolded in July put new limits on consumer tech companies and the private education sector, and cast doubt on whether Chinese companies would be able to list overseas.

Chinese VCs have also scaled back their investments in August, but not as dramatically. The value of all deals in the country so far this month is $6.6 billion, down from around $9 billion in each of June and July.

Earlier this month, SoftBank founder Masayoshi Son said the Japanese conglomerate will halt investments in Chinese startups until the extent of Beijing’s scrutiny of the tech sector becomes clear.

As the US-China trade war rumbles on and relations between other liberal democracies and Beijing deteriorate due to everything from intellectual property (IP) theft to human rights violations in Xinjiang and the eroding away of Hong Kong’s autonomy, many globally-renowned companies are deserting China. In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. Coronavirus-related sales slumps and supply chain disruption, as well as rising production costs, have also hastened the exodus. Read on to discover which world-famous firms are partially or completely pulling out of the People’s Republic. All dollar amounts in US dollars.

Read more at: China venture capital deals shrink amid regulatory concerns

Read more at: Big multinational companies moving out of China


Doing Business in China 2020

The Doing Business in China 2020 handbook comes at an important moment for foreign investors. In the wake of a pandemic and rising geo-political tensions, the global trade environment has changed and the world markets are in an unprecedented period of uncertainty. In response, multinationals have to think differently about how and where they do business. As we move towards a post-pandemic world, companies in search of growth or diversification need to adapt. They need to look beyond traditional ways of doing business and focus their sights on emerging opportunities in the new normal. In this context, China has become more important than ever.



Government Rules are Rules whatever the country is and companies have to fellow the rules and respect the laws in place whatever their importance, size and wealth

FTC Imposes $5 Billion Penalty and Sweeping New Privacy Restrictions on Facebook

Facebook

The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers’ privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide. It is one of the largest penalties ever assessed by the U.S. government for any violation. Jul 24, 2019


Facebook faces record visa fine

Share By Cate Chapman, Editor at LinkedIn News 10/19/2021

Facebook will pay up to $14.25 million in fines to the federal government for discriminating against Americans when it hired more than 2,500 foreign workers with temporary H1-B visas a few years ago — the largest such penalty to date. The Justice Department said the social media giant had not recruited qualified Americans. The red flag came when Facebook applied for permission to hire a foreign worker as an art director, a position normally requiring a bachelor’s degree and two years of experience.

Facebook must also submit to an audit of its visa applications for three years.

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