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Uber just gave up on China

After spending $1 billion a year in competition with the local ride-hailing service Didi Chuxing, Uber is giving up and selling its Chinese branch to its rival.
Imagen por Alex Hofford/EPA

Even a giant can be starved to death, and this weekend Uber Inc. lost its war of attrition in China. After spending $1 billion a year in competition with the local ride-hailing kingpin Didi Chuxing, Uber is giving up on the market and selling its Chinese branch to its rival.

Uber, valued at $68 billion with $12.9 billion in funding, will keep a 20 percent stake in the merger with Didi, but the deal signals the end of its ambitions in one of the world's premier markets, Bloomberg News reported. Investors had been urging the car service company to stop burning cash inside the country and concentrate on profits elsewhere. Bloomberg notes that tabling the Chinese project will clear the way for a public offering.

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Uber is hardly the first US tech giant to lose a gambit to takeover China. Only the biggest dogs have gone after that market, and all of them have ended up scurrying out the door.

Related: That little lawsuit against Uber just got bigger — and could take down the sharing economy

Facebook has failed to make inroads for years, kept from 668 million new users by China's monolithic censorship and restrictions on internet freedom. The country's cyber-security laws leave very little space for foreign companies to operate without becoming a localized and compromised arm of the state. Facebook remains banned as WeChat, Weibo, and Baidu take its place.

A year after China shut down Facebook, Google closed its operations in the country. It had tried to play along the restrictions on information, offering a censored version of the site, until China hacked them in 2010. The company retaliated by redirecting the censored site on the mainland to its open site in Hong Kong, earning itself a ban just like Facebook. It still plans to make another run at the country.

The list goes on: Yahoo! Inc. switched off its services to Chinese users in 2013, and packed up its operation in 2014. The networking site LinkedIn has long appeared to be the exception to the rule: in 2014 it ceded to the government's rules on free speech and began to grow and make partnerships within the country. But those gains may be in jeopardy too, now that Microsoft is acquiring LinkedIn for $26 million.

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