I hardly doubt this money is for real investment most probably just to please to government, this 1B is eventually will be distributed among citizens without a job. Also the big cities became super crowded as being extremly urbanized. In some days traffic jams starts at 3 and between 5-7 everything is just stuck. It might be also a way how goverment try to slightly reduce these issues.
Didi is a private company already worth billions. This isn't money to the government at all. So I don't see how it will be distributed to the unemployed.
If they want to please the government they'd just pay more local tax.
You clearly don't know how business operates in China. China doesn't care about tax revenue or deficits, they want capital investment and capital expenditures (especially in light of recent record capital outflows.) They have strict capital flows for a reason.
In China there isn't really a private/public divide like the U.S., bribing and knowing people in government is absolutely essential in China. Sure, it helps in the U.S. (and every other country), but it's not essential. China is a different beast. Doing business in mainland China is quite the experience, I know of no one who actually likes doing it. The Chinese are still communists after all, and if you have a supplier there...they are not loyal. They will knock your stuff off in a heart beat as soon as you leave.
Well I actually know people who like doing business in China, namely my parents, who own a medium sized tech company there.
There absolutely still is a difference between private and state-owned companies. There are even cases where Huawei loses government contracts to Cisco. Like you said, the water is murky in China, and the favor of Chinese government cannot just be bought by a tiny investment such as this.
There is no guarantee that just because you are a Chinese company, the government will be on your good side. At one point Alipay was almost banned due to some central bank regulation. Didi also has a competitor named Kuaidi, which for all we know can have even deeper connections with the CPC.
Didi acquired Kuaidi some time ago. Changed the name to Didi Kuaidi. Name changed again a little while ago to Didi Chuxing.
To me, this deal is about "You can sell XXX, if you do YYY" YYY may be investment, technology transfer, many things. But a lot of China deals and inward investment in R&D, Operations or Technology are in fact driven by sales. "We need to sell this, and in order to do so, we've been told we also need to YYY."
Why they win, we dont know, but the government ask for gifts time-to-time:
http://www.bloomberg.com/news/articles/2015-06-17/cisco-to-i...
there are similar stories for Microsoft etc, but even Morgan Stanley almost went to bankruptcy in 2008 but in 2009 jan, fully pledges itself to help to build one of the department for Beijing children hospital till its estimated finish date 2011?
You need to answer your own question, that is even if Apple's intention is to please government, why would they choose to invest in a ride-sharing company? Why not choose to build a completely isolated iBooks/iTunes store and grant government free access for censorship, that won't cost 1 billion.
There is already players offering that for free with stolen content. No good comming out from joining that game. Here they were probably asked to invest a considerable amount of money to generate jobs. Like recently there are police in every corner in Shanghai to officially fight against the bar parking practice e.g. parking everywhere. But what is more likely that the sh government was asked to create X new jobs. Apple is not the first one that was asked to contribute back to the economy otherwise its services will be restricted.
