Y Combinator Abruptly Shutters YC China | Hacker News Reader

Y Combinator Abruptly Shutters YC China

techcrunch.com

154 pointsthisisbrians36 comments

Discussion from last week: https://news.ycombinator.com/item?id=21597763

I'd love to assume this had something to do with government abuses and overreach that YC couldn't condone, but call me cynical, im not holding my breath.

Also, I wonder if when asian businesses consider starting up something in the US if local news write articles like this. E.g.:

"That there is no mention of the uncertain international politics and U.S.-China relations right now, nor the explosive situation in Hong Kong, or ongoing human rights issues elsewhere in the country, seems a deliberate choice to make this move seem as ordinary as possible. But those things are major questions for anyone looking to do business in [the US], and it’s hard to believe none had any bearing on the decision to abruptly pack up and leave a major enterprise behind."

Do they actually leave 'a major enterprise' behind?

Don't think so.

I think they put somebody in charge of it, had a conference, I don't know if they ever opened an office.

I think they got pushback from the very beginning, tried to withdraw quietly, then got pushed into taking a stand finally.

> I'd love to assume this had something to do with government abuses and overreach that YC couldn't condone, but call me cynical, im not holding my breath.

It makes it easier when it's difficult to do business there when your IP will just be stolen.

YC China was for funding companies in China. Worrying about IP theft in that context doesn't make sense unless you think YC has significant IP of its own.

If that was the case, then YC should certainly think about exiting the US market as well. Due government abuses and overreach. Wars.... Always we have wars... Concentration camps for immigrants. Torture sites (EU and Asia) and people locked up with no judicial oversight (Gitmo (operated in a communist country).. Mass surveillance.

Operating out of Sweden or Switzerland would be much more desirable if they care about human rights and government brutality.

I agree. But they don't care. Nor do they care about anything happening in China. That was kinda my point. In a way i guess i'm happy they didnt claim it was for some sort of humanitarian reason like many have in the wake of the blizzard thing. They're all lying.

This sort of moral relativism and whataboutism is repugnant.

The author seems to be trying to drum up controversy where there isn't really any.

All businesses in China beside your neighborhood street vendors, noodle joints, corner stores, etc, are required to have a Communist Party Commissar stationed at their top management to control the company when needed.

Major companies (e.g. Huawei, BABA, BIDU) are already "Party owned" (via some complex ownership structure to hide the party behind), or in the process of being transferred to Party owned. Note: Party owned, not state owned. In China, the Party owns the State, and the army. (Can you imagine Republican (or Democrats) owned the US Army?!)

You may start out as a "no-one-cares" startup business, but once you get to certain size or they recognize you as a potential unicorn, they will coerce you to give up part or all of your ownership or insert their Commissar, because the Party cannot stand anyone beside itself to have any influence.

It is the policy of China under Xi Jinping since he gained power, and we are now seeing the effect of it.

Huawei sure, no one knows who really owns/controls them. But Baidu, Alibaba, actually have fairly transparent ownership structures, they aren’t that subject to party control beyond say an American company operating a branch in China.

An American company is likely run by American citizens which comes with some protection from the Chinese government. Chinese companies owned by Chinese citizens don’t have that luxury so it’s similar but not the same.

Kind of sort of? American companies heavily use local talent, or people from Taiwan, often Chinese expats with American citizenship. The government could still apply pressure to family, I guess, but in general the publicity alone is enough to make sure they don’t interfere much. Likewise, American branches want as good relationship with the government as they can get, which tends to temper their actions.

Working in China for 10 years, I can’t say that I didn’t feel the party at all, but their influence in our work was pretty much nil. They mostly interfered in the distribution of benefits and such.

It depends on whether the party considers your business useful to their rule or helpful in implementing their policies. For example, Wechat, Alipay, etc are all very useful.

Their policy is trickling down gradually.

They recently inserted Commissars into a list of Hong Kong real estate companies. So even non-mainland chinese companies are not immune.

Commissars or just trade union representatives? If the latter, Microsoft China had that also, but it didn’t have much of an influence on the company. Commissars would be really strange since that is a role in the PLA.

Board of Director. The title of course is not called "Commissar", but they serve as a defacto one.

Some are public. Some hide their identities (but serve similar purpose). Secret ones usually are used in dealing with foreign entities (i.e. non-mainland). So you may not even know there is one except if you are in the top management.

China would not hesitate to use your Chinese branch as a leverage to influence your business even in the US, e.g. Airlines, NBA, etc. Unless you are decoupled from China, you are not immune.

Same goes for the US. US will use branches of foreign companies to leverage its rules.

Please

https://twitter.com/adamscrabble/status/1195069077028581376

http://www.deepthroatipo.com/just-one-thing-about-the-alibab...

https://twitter.com/adamscrabble/status/1180205067321970688

It was the policy of China before Xi Jinping as well.

Not quite as aggressive as now. It is called "国进民退".

国进民退 guó jìn mín tuì "state advances, private retreats" was coined to refer to the Chinese government bailing out state-owned enterprises while letting private companies go bankrupt after the 2008 financial crisis. That's both not "now" and also before Xi's rise to power.

It has been extensively used to describe the current situation - expansion of government's role in business and diminishing of private enterprises.

It is not aggressive, it just wasn't as obvious before to those outside of the circle.

If they choose to be "obvious", they mean to show rather than hide it. It is a more aggressive tactic to bring others into the fold. There is no accident when it comes to these things for the communists. It serves as a warning shot.

Funny enough, I was thinking about this last week and noticed that they hadn't said anything at all about YC China in a long time. I had figured that they'd quietly abandoned the effort, walking it back the same way that the media is letting Mike Bloomberg walk back his presidential campaign.

People jumped all over them when they announced it. I think every city and town in the world has been asking for YC to come and when they refuse everybody in countries where there is rule of law, private property, etc. and then endorse communism that was a problem.

For instance in most countries if we have a labor union somewhere or regulate something it seems we are not liberal enough so capitalists will invest elsewhere. China doesn't pretend to have free markets at all but billionaires want to invest there.

It is nice seeing people who were up in arms about Trump's abortive "Muslim ban" are waking up to issues of ChiComs vs Hong Kong, Tibet, Uyghurs, etc.

In the meantime it is a source of extreme stress on western democracies that we're told we will lose investment if we are not neoliberal but then see that investment go to a place that doesn't believe in any rights for anyone whatsoever.

People should be more concerned about the possibility of a future war with China.

There needs to be some kind of political and cultural integration. If not, resource and territorial contention as well as worldview differences may come to a head and be resolved through violence.

These are extremely difficult problems and a very dangerous potential outcome of we fail. We should be making dramatic efforts towards integration.

One idea: the lunar mission should be prioritized and be led by a joint China/US team.

The article is looking for gossip where none exists. If the guy leading the charge into China is stepping down, that's entirely sufficient to drop it.

If it's not a well-established and ongoing concern, a bus factor of one is wholly plausible.

https://en.m.wikipedia.org/wiki/Bus_factor

The the question arises why did he (Sam Altman) step down?

Cause it's a 14 hour flight each way.

My understanding is that he's not stepping down - he's going to continue under a different company name, unaffiliated with YC

He has stepped down as president of YC. It's really past tense and that sentence of mine perhaps went weird places because of talking about a mix of past events and current events.

Wikipedia indicates he isn't severing his connection to YC, just scaling it back. Beyond a sentence or two found on Wikipedia, I have no idea what Sam Altman is up to.

Sam Altman is not the "man leading the charge into China". That would be "Qi Lu, hired a little more than a year ago to lead the YC China effort".

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