Why China's regulators are softening on its tech sector

So I was inspired after talking to Angela Huyue Zhang, a law professor in Hong Kong who's coming to teach at the University of Southern California this fall, about her new book on interpreting the logic and patterns behind China's tech regulations. We talked about how the Chinese government almost always swings back and forth between regulating tech too much and not enough, how local governments have gone to great lengths to protect local tech companies, and why AI companies in China are receiving more government goodwill than other sectors today. To learn more about Zhang's fascinating interpretation of the tech regulations in China, read my story published today. In this newsletter, I want to show you a particularly interesting part of the conversation we had, where Zhang expanded on how market overreactions to Chinese tech policies have become an integral part of the tech regulator's toolbox today. The capital markets, perpetually betting on whether tech companies are going to fare better or worse, are always looking for policy signals on whether China is going to start a new crackdown on certain technologies. As a result, they often overreact to every move by the Chinese government.