Worth doing a bit more analysis to inform this crystal ball.

If we think more concretely about the specific situation political leaders and regulators in Beijing find themselves in, I think we can pretty well guess at their mindset and the future (with a grain of salt) 1/
First, "green lights" to capital. The fact is, there are loads of signals to capital about what to invest in (like the subsides I mentioned in the original thread)... and they work! Investors are attracted. I don't think much more prodding needed 2/

And there are, of course, message about what *not* to invest in - including clear sectoral investment prohibitions.

So why is an additional system of "red lights" (or w/e it ends up called) needed? Putting myself in gov't shoes: it's needed b/c you can't predict the future 3/
The concrete example: the unexpected bikeshare war money bonfire, which everyone thought was crazy, not only the gov't.

The gov't now put in rules against cash burning, but the issue is that its *after the fact*. It doesn't unburn that money (regulation always works this way) 4/
Channeling my inner cadre: The obvious question is, "why couldn't we intervene more quickly when things are going off the rails? Why do we have to wait for the system to form rules?"

And more importantly: "how can intervene more nimbly w/o being arbitrarily disruptive?" 5/
Keep in mind: the government also *loves bikeshare!* It's a genius innovation, it solves a very real transportation problem... there's implications for health and carbon blah blah

If only Mobike & Ofo didn't try to murder each other money! If only we could have *GUIDED THEM* 6/
The obvious answer to this dilemma, it seems to me, is not to create new rules, or bestow more powers... but to create *new norms*. Norms *guide* behavior, but they don't dictate it. 7/

The norms the "traffic light" concept is working at (imho):

- Normal for the party/government to regularly give subjective feedback to capital on the "goodness" of its behavior
- It's expected that capital will listen (and it will, b/c the alt is being blown up, a la edu!) 8/
This is why I'm anticipating the party/gov't to behave more like a "backseat driver" going forward. That's what such a system of "advice you have to take to heart" looks like 9/

And a bit of editorializing: maybe it won't be such a bad system, or difficult to deal with. After all, that bikeshare cash bonfire maybe could have been doused a bit earlier... 10/
The problem, of course, is it escalating to the point of consistent disruption... I mean, we all know what having a backseat driver is like. It makes you want to get out of the car, or drive over a cliff

And I'll end this here... enough speculation for a Saturday morning...

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More from @freefader

14 Jan
The Chinese government is rethinking the role of private capital in the economy.

One of the big questions for 2022 (and beyond): how the state should adjust the way it guides private investment.

A quick thread on how the Chinese gov't *might* influence the way you invest
One key theme of the “tech crackdown” last year was the state’s resolution that capital needs to be better controlled – no more “disorderly expansion.”

This goal of more control was made more explicit at the December Central Economic Work Conference (CEWC).
To this end, at a speech at the CEWC, Xi Jinping talked up the idea of a "traffic light" system to guide investment. Red means stop (investing in perceived unhealthy businesses), green means go (on state priorities, like hard tech).

Read 11 tweets
12 Nov 21
There's an overlooked debate re: data security policy in China. Yesterday, a researcher at CAICT - a think tank under MIIT that supports research and rollout of ICT policy - published an op/ed arguing that current global views on data localization are seriously flawed. 1/
Why it matters: data localization requirements are a critically important (and still evolving) piece of China’s cyber/data security framework. Compliance with strict (and vague) data localization requirements in China is a major strategic business challenge for multinationals. 2/
The surprising crux of the op/ed’s argument: the benefits of data localization are far from clear, and there are huge potential costs from implementing the concept poorly.

"The role of data localization in maintaining national security is doubtful." 4/

Read 12 tweets

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