What The Hell America!

As Jessy Wu prepared to launch her Beijing-based artificial intelligence startup overseas last year, she grappled with a question familiar to many Chinese tech founders: Should her company hide its Chinese identity?  

For years, as governments in the U.S., Europe, and elsewhere restricted Chinese apps and technologies over national security concerns, many companies practiced what came to be known as China shedding — downplaying and obscuring their origin in overseas markets to win over investors and customers. But the global success of Chinese social media apps and the launch of a successful AI model by startup DeepSeek earlier this year have convinced some founders like Wu that they no longer need to do so. 

“DeepSeek has shown us that as long as our product is competitive, we should not worry too much about being a Chinese company,” Wu told Rest of World. “The popularity that TikTok and RedNote have been receiving in the U.S. shows us that users are actually welcoming towards good Chinese products,” Wu said, adding that her film-generation platform has steadily grown its user base across the U.S. and East Asia while being openly Chinese.

Wu’s confidence signals a shift among Chinese startups. Rather than avoiding calling attention to their Chinese roots, they are promoting the competitive advantages of being Chinese. DeepSeek’s rise has attracted foreign investors searching for the next Chinese tech breakout, and Chinese tech companies are launching English-language product videos and even speaking with foreign media — something that executives had shied away from.

Startup founders who spoke with Rest of World said they are leaning into the strengths of their Chinese roots — such as engineering talent and cheaper production costs — while hiring foreign staff and complying with local regulations to avoid the sort of scrutiny faced by larger firms, such as TikTok, drone company DJI, and top electric vehicle maker, BYDiBYDBYD Auto is a Chinese carmaker that became the world’s leading EV manufacturer in 2023, competing with Tesla for market share and global attention.READ MORE.

Jia Zijian, who launched his language-learning app TalkMe on global app stores last year, said DeepSeek’s success is proof of Chinese startups’ competitiveness.

“DeepSeek gives Chinese tech startups an image boost. … I believe foreign companies can hardly compete with the kind of innovation we create with such cost efficiency,” Jia told Rest of World.  

Although his 10-person team is based in Beijing, Jia registered his company in Singapore last year, like many Chinese companies have done to avoid close scrutiny, a move that has come to be known as Singapore-washing. His goal was to better attract foreign capital, he said.

“Where we place our company tells people where we are focused,” he said. Conversations with investors led him to believe that “there is no need to cover up, but also no point branding as Chinese,” he said, adding that his app was built entirely on foreign AI models and that all transactions were made through foreign banks.

Jia’s strategy is a common one. Some Chinese apps that launched in the past three years, such as short-form video app ReelShort and AI video generator HeyGen, have moved their operations and staff to California even as they have been open about their Chinese origin.

This approach is a mix of pride and pragmatism, said Ivy Yang, a China tech analyst and founder of New York–based consulting firm Wavelet Strategy, which provides communications and reputation management services for Chinese companies in the U.S.

“I wouldn’t go as far as to say that Chinese AI companies will suddenly make their Chineseness a selling point, but [it was] definitely a sigh of relief [after DeepSeek’s launch] that they will be less likely penalized for it,” Yang told Rest of World. 

Chinese companies have long hired Westerners to project an international image — sometimes as executives, other times as paid actors for events — a practice so widespread it is known as the rent-a-foreigner industry. That strategy has since evolved. 

Even a year or two ago, conversations with Chinese clients always began with “How do we eliminate the Chinese aspect of our image?” Chris Pereira, Singapore-based chief executive of iMpact, a communications firm advising Chinese companies expanding abroad, told Rest of World. 

Now, Pereira said, more clients are asking how to tailor their products and services for overseas markets. “It is not to hide their identity, it is to localize their operations,” he said. 

“DeepSeek and [other] successful Chinese companies overseas right now are giving the people coming in the wave behind them more confidence to just be themselves — it’s OK to be Chinese overseas.”

For startups seeking foreign investment, registering overseas and setting up separate business operations outside of mainland China is a natural choice, Bob Chen, an economist at China-based investment firm FG Venture, told Rest of World. 

“Whose money a startup is trying to get would determine how exposed they want to be about their Chinese affiliation,” Chen said. 

Chinese startup Butterfly Effect, creator of general-purpose AI agent Manus, is reportedly considering relocating its headquarters to Singapore and has already registered a corporate entity there, as it raised $75 million from U.S. venture capital firm Benchmark. 

Chinese tech companies remain wary of political tensions and regulatory scrutiny, particularly in the U.S. TikTok faces a potential ban in June unless its Chinese parent company ByteDance sells it, although U.S. President Donald Trump has said he would extend the deadline. The short-video app, registered in Singapore, has faced concerns regarding data security and privacy as well as Chinese government influence. TikTok, which has a Singaporean CEO, has denied these allegations. 

The U.S. government is also assessing whether Chinese drone-maker DJI should face restrictions on national security grounds. BYD faces similar concerns in some countries.

More Chinese tech companies are placing greater emphasis on compliance with local regulations on data security and technology transfer to avoid scrutiny, according to a study by consulting firm Deloitte. 

As Chinese companies expand abroad, they will focus more on creating distinctive global brands, Pereira said. Companies going overseas are choosing Western names, he said, citing Temu, the international sister brand of popular shopping site Pinduoduo in China, as an example. 

“It’s just like Coca-Cola has a Chinese name, Kekoukele. … if we look at it from that perspective, it’s exactly what the American brands do globally too,” he said. “It is not to hide their identity, it is to localize their operations.”