Before putting money into China's tech/crypto scene, run these checks:
🔍 Regulatory minefield - CCP can ban entire sectors overnight (see: crypto mining 2021, gaming crackdown). Check if your target industry is currently in favor or facing pressure.
💰 Capital controls - Getting money OUT is the hard part. CNY isn't freely convertible. If you're dealing with blockchain projects, verify actual fund flow mechanisms beyond whitepapers.
🏛️ VIE structures - Most Chinese tech uses Variable Interest Entities to bypass foreign ownership rules. You're buying contracts, not equity. Understand the legal gymnastics.
📊 Audit opacity - Many Chinese firms use local auditors. Cross-reference financials with on-chain data if crypto-related, or third-party transaction volumes for tech platforms.
🌐 Great Firewall factor - If the project needs global internet access, how are they handling censorship infrastructure? VPN reliance = fragile architecture.
⚡ Tech stack sovereignty - China prioritizes homegrown tech (Harmony OS, Loongson chips). Projects heavily dependent on Western tech stacks face swap-out risk.
The opportunity is real (massive market, fast execution), but liquidity traps and regulatory whiplash can wreck you faster than anywhere else.
🔍 Regulatory minefield - CCP can ban entire sectors overnight (see: crypto mining 2021, gaming crackdown). Check if your target industry is currently in favor or facing pressure.
💰 Capital controls - Getting money OUT is the hard part. CNY isn't freely convertible. If you're dealing with blockchain projects, verify actual fund flow mechanisms beyond whitepapers.
🏛️ VIE structures - Most Chinese tech uses Variable Interest Entities to bypass foreign ownership rules. You're buying contracts, not equity. Understand the legal gymnastics.
📊 Audit opacity - Many Chinese firms use local auditors. Cross-reference financials with on-chain data if crypto-related, or third-party transaction volumes for tech platforms.
🌐 Great Firewall factor - If the project needs global internet access, how are they handling censorship infrastructure? VPN reliance = fragile architecture.
⚡ Tech stack sovereignty - China prioritizes homegrown tech (Harmony OS, Loongson chips). Projects heavily dependent on Western tech stacks face swap-out risk.
The opportunity is real (massive market, fast execution), but liquidity traps and regulatory whiplash can wreck you faster than anywhere else.