Due to a combination of cultural differences and regulations designed specifically to hinder foreign companies, it’s very difficult for Western companies to operate in China. That notorious difficulty wasn’t enough to stop Uber from trying to establish itself as China’s dominant ride-sharing service, however, but despite the company’s extensive efforts, it failed. Uber announced on Monday that it’s selling its Chinese division to Didi Chuxing, its biggest competitor in China, for an undisclosed amount. Uber still dominates in just about every other country on the planet, however, so it’s not that bad.
Travis Kalanick, the co-founder and chief executive of the ride-hailing giant Uber, often defended his eagerness to risk billions on winning the Chinese market with a simple question: If you have a chance to become Amazon and Alibaba at the same time, why not try? The implication was simple. Over the last couple of decades, Amazon, Facebook, Google and other American technology giants have each followed a similar script for world domination. Like an imperial armada rolling out from North America’s West Coast, these companies would try to establish beachheads on every other continent. But when American giants tried to enter the waters of China, the world’s largest internet market, the armada invariably ran aground. Plagued by opaque and ever-shifting regulations and a culturally abstruse way of doing business, American companies fell to a series of local giants. Instead of Google, Baidu. Instead of Facebook, WeChat, owned by the giant Tencent. And instead of Amazon, Alibaba. That has left us with a divide: Today, there is the Chinese internet, and there is the internet of the rest of the world. A network seen in its early days as a tool to foster financial and political unity across a fragmented planet has irrevocably cleaved into two completely separate spheres.