Ex-Cisco CEO advises his start-ups in opposition to doing enterprise in “unpredictable” China

Former Cisco CEO John Chambers told CNBC on Monday that he was holding the startups he invested in from working in China, citing Beijing’s increasingly uncertain regulatory approach.

“I encourage my startups not to do business in China, or I am currently not investing in Chinese startups,” he said in a TechCheck interview. “It’s too unpredictable,” added Chambers, founder and CEO of JC2 Ventures, who has decades of corporate experience in China.

Chambers’ comments come after the Chinese government stepped up crackdown on the country’s tech companies. Recent targets have included Didi – just days after the ride-hailing giant went public in the US – and private education companies. On Saturday, the Chinese antitrust authorities fined Tencent and ordered the company to give up its exclusive music licensing rights.

Chambers said he started doing business in China about 40 years ago and that the government has taken a markedly different stance over the past decade. Beijing now not only wants more control over the American high-tech companies operating in China, but also over Chinese start-ups.

“I think it’ll probably get a bit tougher before it gets better,” said Chambers, claiming the Chinese government sent a “really clear message” to domestic tech companies that “if you get out of line, we’ll bring you back on track very quickly. “

Others with experience in Chinese business have similar concerns. “I’m an innate optimist when it comes to China. But I find these actions really quite disturbing,” Stephen Roach, former chairman of Morgan Stanley Asia, told CNBC last week. David Solomon, CEO of Goldman Sachs, told CNBC earlier this month that he expected at least some Chinese companies to delay their plans to go public in the US due to recent government actions.

Chambers said he expected the business and investment landscape in China to improve over time, even if it’s rocky right now. “Do I think that will be corrected at some point? Yes. I don’t think it will lead to the kind of Cold War that some other people have referred to, “Chambers said.

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