20 November 2019 | By DF

There is a perception that the Chinese market is generally inaccessible to non-Chinese companies. As Elad Gil puts it:

“Basically every other tech giant has been blocked and then cloned in China, with early operations shutting down... For most companies, a China strategy ends up being a painful, money-burning fail”. Elad Gil (2018) High Growth Handbook. Stripe Press. ISBN 9781732265103.

As of May 2020, there is only a short list of US tech companies who can meaningfully consider themselves as having succeeded in China:

• Uber (with its 20% ownership of DiDi)
• Qualcomm and Intel (their chips being indispensable in smartphones and PC respectively)
• Airbnb China((I was unable to find authoritative statistics on how much of Airbnb's revenues come from China—in the aftermath of COVID-19, there is now much more that is uncertain about Airbnb's business.))
• Apple

There are many other US tech companies with some presence in China, including:

• Amazon’s Kindle and AWS businesses ((Amazon shut down its China marketplace business in April 2019 after being out-competed by Chinese retailers.))
• Microsoft
• Atlassian
• Workday
• Oracle
• IBM

As far as I can tell, for all of these companies, their China revenues comprises approximately a single-digit percentage point to their overall revenues.

Then, there is a long list of US tech companies whose services are simply blocked in China, of which Google and Facebook are the two most notable.(Even then, it should be noted that both companies sell good amount of ads to Chinese customers trying to reach overseas consumers.)

Two separate but related reasons explain this.

First, on top of the Great Firewall, the Chinese government has rolled out other Internet-specific regulations, such as the China Internet Security Law in 2016, an e-commerce law in 2018 and so on. These regulations are motivated by a mix of social stability considerations, protectionism, industrial policy, and subject matter-specific concerns.