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LinkedIn is shutting down its China platform because of a 'challenging operating environment'.

SEATTLE (AP) — LinkedIn announced on Thursday that it was shutting down its professional networking service in China later this year, citing "a substantially more demanding operating environment and greater compliance requirements," in a move that completing the fracture between American social networks and China.

LinkedIn, a Microsoft-owned company, has announced the launch of a new job-focused app for the Chinese market. It would lack social networking capabilities like sharing and commenting, which have been crucial to LinkedIn's success in the US and elsewhere.

LinkedIn’s action ends what had been one of the most far-reaching experiments by a foreign social network in China, where the government has tight control over the internet in this country.

For years, Twitter and Facebook have been restricted in the country, and Google has been gone for more than a decade. China’s internet, which operates behind a system of filters known as the Great Firewall, is heavily censored and has gone in its own direction.

When LinkedIn launched a localised service in China in 2014, it provided a rudimentary blueprint for other major Western internet companies eager to enter the country's massive, profitable, and heavily controlled market. The company formed a partnership with a well-connected venture capital firm, which it claimed would boost it in government relations.

However, LinkedIn promised to censor posts posted by its millions of Chinese users in compliance with Chinese legislation, something that other American companies have been hesitant or unwilling to do in the past.In a statement released in 2014, LinkedIn stated, "LinkedIn strongly supports freedom of expression and fundamentally disagrees with government censorship." At the same time, we believe that without LinkedIn, Chinese professionals will be unable to communicate with one another.”

After seven years, it is clear that the experiment was a failure. LinkedIn is the only major internet platform that has followed in its footsteps. Its business in China faltered as it faced large local competitors and a population wary of openly disclosing sensitive information.

“It's gotten pretty ugly around the world where authoritarian governments are forcing the private sector, particularly US tech companies, into these dilemmas,” said Eileen Donahoe, executive director of Stanford University's Global Digital Policy Incubator and former US ambassador to the United Nations Human Rights Council.

LinkedIn was uncommon, she added, in that it kept a bare-bones product in China rather than withdrawing completely. "It's not as straightforward as 'they're the bad guys, get out of there,'" she explained. "There is a price to pay."

In addition, the operating environment in China has deteriorated. President Xi Jinping has regularly clamped down on what can be written online since taking the reins of the Communist Party in 2012.

Mr. Xi, who presided over the Cyberspace Administration of China's rise to power as the country's internet regulator, transformed China's internet from a place where some sensitive topics were censored to one where critics face arrest for a constantly shifting set of infractions, such as making jokes about Mr. Xi.

The regulator chastised LinkedIn in March for failing to monitor political content, three persons briefed on the matter said at the time. Officials demanded that LinkedIn do a self-evaluation and provide a report. The firm was also obliged to put a 30-day moratorium on new sign-ups from Chinese users.

As the United States' relationship with China deteriorated, resentment about LinkedIn's role in China's information restrictions grew in Washington. In recent months, American politicians have chastised LinkedIn for removing the profiles of several Chinese activists and journalists.

Senator Rick Scott, a Republican from Florida, wrote to Microsoft CEO Satya Nadella last month, wanting to know why the company had banned the accounts of three journalists. The censoring, according to Mr. Scott, is "extreme appeasement and an act of capitulation to Communist China."

Other challenges loomed in addition to the censorship fights. A new Chinese data security law mandates companies like LinkedIn to hold more data on Chinese users and give authorities access, which may have sparked even greater outrage.

The shutdown shatters one of the remaining social media bridges connecting China's closed internet to the rest of the world, albeit in filtered form. That may not matter to Chinese officials, who have cleverly exploited foreign social media platforms that are blocked in the country. The government has been linked to a series of disinformation tactics on social media sites such as Twitter and Facebook in recent years. The sites also feature a lot of advertising from the government and state-run media.

LinkedIn has also been used for a different purpose: it has been used to recruit spies. C hinese intelligence services are among the most active users of it for that reason, according to American officials.

With 54 million users, China is the third-largest LinkedIn market after the United States and India. It doesn't disclose  how much revenue each country makes.

LinkedIn's income has tripled since Microsoft purchased the company for $26.2 billion in 2016. In July, Mr. Nadella told investors that LinkedIn's annual revenue had reached $10 billion, up 27% from the previous year.

Beyond its announcement, LinkedIn declined to comment.Microsoft has attempted to establish a market in China for more than a decade with limited success. Last year, Microsoft's president, Brad Smith, stated that the country accounted for less than 2% of the company's sales.

In China, Microsoft Windows and Office are widely used, however many people use pirated versions. The company has attempted to address the problem by putting its software online and enlisting the support of a big Chinese military contractor to develop an operating system that is more trusted by the Chinese government.

In China, private IT companies have had a rough year. Mr. Xi has presided over a slew of investigations, bans, and new laws that have effectively shut down several of China's most well-known local internet firms, including Alibaba and Didi.

"The breadth and extent of Beijing's crackdown has been so shocking that not only Chinese corporations but also American companies have had to step back," said Dan Ives, an analyst at Wedbush Securities. "The last thing Microsoft wanted was to become embroiled in a political battle in China."

Mr. Nadella and LinkedIn's chief executive, Ryan Roslansky, did not make the statement on Thursday, indicating the sensitivity of the news. Instead, Mohak Shroff, the social network's head of engineering, did.

While Microsoft's exit from the thorny LinkedIn business is welcome, it raises concerns about the future of its search engine, Bing. Bing, the lone major American search engine still active in China, suppresses its results as well. It was momentarily blocked in the country in 2019, despite the fact that it continued to direct users to state-run media accounts on contentious issues such as the Dalai Lama.