What we call 'tech' is comprehensive and the article focused on the service side of 'tech'. Amazon is a 'tech' service company. So are Uber and Baidu. Each company uses one sector of 'tech' to enhance the servicing of a need.
What China does is forced foreign companies into partnerships where the government have high stakes interests. This has been well known for decades when China abandoned the communist model for her economy.
In my industry -- semiconductor -- forced partnerships can be overt and/or subtle. The Americans, the JPNese, the SKReans, and the Taiwanese all must deal with the Chinese government one way or another.
http://store.kiplinger.com/energy-alerts/tech-alerts-2016-05-11.html
China's pursuit of chip autonomy is sure to roil international relations.Rising tensions will lead to battles over sharing intellectually property and stoke fears over cyberespionage. Plus, China is increasingly forcing foreign tech companies, including chip firms, to partner with local Chinese companies in order to tap the country's massive market. Expect more tussles over trade deals, too, as China becomes more protective of its chip business. "The semiconductor industry is incredibly dependent on free trade," says Neuffer. "We're supportive of China building their industry, but we have some concerns about their efforts to create an island in itself."
Local officials have great latitude on how to enforce these partnerships. Everything from construction to licenses, local officials can make or break an investment. A side effect of that is a deep and wide reservoir of corruption money.
Some sectors of 'tech', such as manufacturing, can be successful for a foreign company since manufacturing is the foundation for growth. On the consumer -- retail -- side, it is a different story. Consumption is fast and growth in this sector usually outpaces manufacturing. China have every interest to have domestic companies as overwhelmingly dominant as fast as possible. In the time it takes to build just a shell of a semicon fab, which is 3-4 yrs, a retail start up of 'tech' can generate enough profits to divest itself of any foreign investor and become standalone.
http://www.nytimes.com/2006/09/17/business/yourmoney/17baidu.html?_r=0
In exchange for letting censors oversee its Web site, Baidu has sealed its dominance with support from the Chinese government, which regularly blocks Google here and imposes strict rules and censorship on other foreign Internet companies.
So for China, there are some observant minds in government to know which 'tech' sector should be allowed to have continual foreign companies presence for the long term, and which sectors to swiftly remove foreign companies once their usefulness, meaning introduction of new ideas to do things, are done.
I used to work for Micron. Today, Micron is still needed in China since semiconductor is still an infantile industry for Chinese talents. Same for Samsung and Hynix (SKR) and Toshiba (JPN). These foreign companies, in forced partnerships, are considered to be useful to China for at least another decade, probably longer. This is not an unrealistic view considering it takes 3-4 yrs to build a shell of a fab and to populate it with the equipment, 1-2 yrs to train the manpower and to produce products that can pass the minimum market quality standards, and one more yr to be profitable. Before all of this, it can take up to 2-3 yrs for site assessment, which includes local population education level, water, electricity, and assorted infrastructure. If the local roads are substandard, how can the people get to work ? For each site that is approved by the investor and the Chinese government, at least 5 were rejected.
This article is at best incomplete and at worst misleading.
