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China’s Golden Tech Grab

The authorities’ effort to discipline Chinese tech firms over the last 18 months has been clumsy and highly costly, featuring a raft of opaque and unpredictable regulations. But the approach the government seems poised to replace it with is not much better.

HONG KONG – Hopes are rising that China’s embattled tech giants will finally get a reprieve from the severe legal and regulatory crackdown that has wiped out over $1.5 trillion of their shares’ value. Amid mounting challenges to economic growth, some Chinese government officials have signaled a possible shift to a new strategy: the acquisition of a 1% equity stake – or a so-called golden share – in major tech firms. But will this approach really brighten the outlook for China’s tech industry?