China Decode: Why China Got Locked Out of SpaceX and America’s Biggest IPOs (ft. Ed Elson)

What It Covers

Ed Elson joins Alice Han on China Decode to examine three converging forces reshaping global markets: Chinese investors being excluded from the $86 billion SpaceX IPO, the structural barriers preventing a Chinese trillionaire, and diverging US-China policy responses to AI-driven labor displacement affecting an estimated 278 million Chinese workers by 2049.

Key Questions Answered

• •Capital decoupling mechanics: China's securities regulator CSRC has cracked down on offshore brokerages like Tiger Brokers and Futu Holdings to restrict Mainland capital flowing into US-listed stocks. This is Beijing-driven, not Washington-driven. Investors should expect this trend to accelerate, redirecting Chinese capital toward Mainland and Hong Kong listings, including 50+ robotics companies currently in the IPO application pipeline.
• •Pentagon entities list — shadow vs. substance: The Pentagon's Chinese Military Companies list now includes Alibaba, BYD, and Baidu, but the practical restriction is narrow — it only bars Pentagon contracts. The real impact is a chilling effect on corporate America. Hollywood executives, for example, privately admire ByteDance's video AI platform CDance but refuse to engage it due to fear of Washington political backlash and future sanctions exposure.
• •ByteDance valuation gap: ByteDance carries an estimated $600 billion private valuation on $186 billion in 2025 revenue. Applying Meta's 10x revenue multiple would value it at $2 trillion. This "China tax" discount reflects investor fear of regulatory intervention, not fundamentals. The company has no near-term IPO plans because it generates sufficient cash, avoids regulatory scrutiny, and faces unresolved algorithmic export control complications tied to TikTok US.
• •AI talent dependency undermines decoupling: Approximately 38% of top US AI talent consists of Chinese nationals, not Chinese-Americans. Tech workers across the industry confirm frontier model development is currently impossible without this pipeline. Any serious national security strategy targeting Chinese AI access would require restricting PhD and postgraduate visas — a move that would directly cripple US AI development and that the administration has not pursued.
• •China's AI labor framework: China's Workers' Daily identified three specific AI labor threats requiring legal protection: digital cloning where employees train AI avatars of themselves tied to performance reviews; AI used as illegal termination pretext, already ruled unlawful by Chinese courts; and opaque algorithmic oversight blurring working hours and cutting gig worker pay. Chinese courts are already adjudicating cases, while the US has issued zero equivalent protections.
• •Data center political risk in the US: Political opposition, not power supply or supply chains, is the primary obstacle to US AI infrastructure expansion. In 2025, tens of billions in US data center projects were blocked by community and political pushback. Nineteen states are considering construction restrictions or outright moratoriums. Meanwhile, major US tech companies are quietly adopting Chinese open-source models like Qwen because they are approximately 96% cheaper than OpenAI equivalents.