What China Expects From Businesses: Total Surrender

When Pony Ma, head of the Chinese internet powerhouse Tencent, attended a group meeting with Premier Li Keqiang in 2014, he complained that many local governments had banned ride-sharing apps installed on smartphones.

Mr. Li immediately told a few ministers to investigate the matter and report back to him. He then turned to Mr. Ma and said, “Your example vividly demonstrates the need to improve the relationship between the government and the market.”

By then Tencent had invested $45 million in a ride-sharing start-up called Didi Chuxing, which later became a model in the government’s push to digitize and modernize traditional industries. When President Xi Jinping met with global tech leaders in Seattle in 2015, Didi’s founder, Cheng Wei, then 32 years old, joined Jeff Bezos of Amazon, Apple’s Tim Cook and Mr. Ma at the gathering.

But the relationship between Beijing and the tech sector has splintered badly in the past year. Didi is now a target…

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