How
do firms navigate regulatory environments characterized by ambiguity, selective
enforcement, and ex post interpretation? Rather than relying solely on material
compliance or observable organizational restructuring, firms seek to reduce
political risk by discursively portraying themselves to be closer to the state.
We examine this argument in the context of China’s 2020 technology crackdown,
which was characterized as an ambiguous regulatory environment rather than a
mechanical application of clear ex ante rules. Exploiting this episode, we
conduct a difference-in-differences analysis on a panel of over 5,500 publicly
listed Chinese firms (2017–2023), comparing rhetorical shifts in annual reports
between firms in the targeted technology industry and all other listed firms
before and after the crackdown. We find that tech firms significantly increased
references to "national revival" and "corporate role" to
signal political loyalty to the state in response to extreme policy uncertainty
as a result of interpretive governance. Our findings contribute to the study of
authoritarian business-state relations and corporate political strategy by
showing that rhetoric itself can function as a strategic response instrument.