China's Great Firewall has fostered strong local firms, making it nearly impossible for US tech giants to succeed there, even if they comply with gov't rules
this is why I tell entrepreneurs not even to try
Context & Ripple Effects
This piece lands a year after a more optimistic take in the same corpus: [[a:830507|Evernote, LinkedIn, and Uber were framed as succeeding in China by playing by the government's rules]]. The Washington Post's verdict reverses that framing — compliance was never the binding constraint, because the Firewall itself incubated local champions strong enough to hold the market.
That reframing matters beyond 2016: later coverage shows the same wall cutting both ways, with experts arguing censorship and state control left China behind the US in AI tools like ChatGPT, and mainland founders now seeking residency abroad to sidestep US curbs aimed at Chinese firms.
First-order effects
- US companies betting on rule-following entry — the LinkedIn/Uber/Evernote playbook of 2015 — face a strategic dead end: even full compliance cannot dislodge entrenched domestic rivals shielded by the Firewall.
Second-order effects
- Advisors and investors redirect would-be entrants away from China entirely — the author's own counsel to entrepreneurs not to try — shifting Western startup capital toward markets where incumbency, not regulation, is the main barrier.
Third-order effects
- If the pattern holds, the internet consolidates into two structurally separate ecosystems: protection builds durable local monopolies inside the wall while simultaneously starving those firms of the open exchange that produced tools like ChatGPT elsewhere.
The trend: State-managed internet borders are hardening from temporary market barriers into permanent ecosystem splits, where compliance-based market entry gives way to parallel, self-contained tech stacks.