DealBook Briefing: China Is Now a Minefield for Western Companies


Good Wednesday morning. Breaking: The O.E.C.D. proposed new corporate tax rules this morning that would make it harder for multinationals to minimize their tax bills by shifting profits to different regions. (Was this email forwarded to you? Sign up here.)

Western companies across multiple industries have found it increasingly difficult to navigate Chinese markets as the Asian nation becomes more politicized — and punitive.

Controversies that other businesses have faced this year:

• Leica, the German camera company, created a stir with a promotional video featuring the “Tank Man” from the Tiananmen Square pro-democracy movement. (The company says it didn’t commission the film.)

• Coach, Givenchy and Versace apologized to China for producing T-shirts that apparently identified Hong Kong as an independent country.

Facebook said the ad did not violate its policies. “Our approach is grounded in Facebook’s fundamental belief in free expression, respect for the democratic process and the belief that, in mature democracies with a free press, political speech is already arguably the most scrutinized speech there is,” Katie Harbath, Facebook’s head of global elections policy, wrote in a letter to Mr. Biden’s campaign.

But CNN rejected the ad, saying that it made assertions “that have been proven demonstrably false by various news outlets.”

The social network has already faced accusations of censorship by conservatives, including President Trump. Abstaining from moderation of political content is leaving it open to criticism from liberals like Senator Elizabeth Warren, a rival of Mr. Biden’s, who say it’s widely spreading false information.

Venture capitalists and entrepreneurs are now focusing on getting start-ups on the path to profitability, and not just as big as possible, Erin Griffith of the NYT writes.

• The shift has come after the collapse of WeWork’s I.P.O. plans and the frosty reception in the public stock markets to Peloton, SmileDirectClub, Uber and Lyft. All lose money, and some lose a lot.

• “Now some investors and start-ups are beginning to rethink that mantra and instead invoke turning a profit and generating ‘positive unit economics’ as their new priorities,” Ms. Griffith writes.

• “At Eniac Ventures, a venture firm in New York and San Francisco, the partners recently combed through their companies and identified the ‘gross margins’ — a measure of profitability — for each one, said Nihal Mehta, general partner of the firm.”

• Bird, a highly touted scooter start-up, recently raised $275 million, but only after taking steps this year to shore up its losses, according to its C.E.O., Travis VanderZanden.



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