Mention China and technology and two companies probably spring to mind: Alibaba and Tencent. It is hard not to marvel at the seamless integration of consumption, financing, communication and more into one app, or the vast consumer sales that result. But tech companies and investors outside China might be better off looking at the experience of two non-tech firms, Anbang Insurance and CEFC China Energy, to understand what the tech industry might one day contend with in China.
Once viewed as juggernauts driving growth in their respective industries, both Anbang and CEFC have been sharply reined in recently by a government unwilling to tolerate the firms’ aggressive expansion. While tech conglomerates Alibaba and Tencent have faced less overt interference, Beijing’s actions toward Anbang and CEFC should serve as a reminder for any enterprise doing business in China about how easily they could fall out of favor with Beijing.