They made a mistake of going into China. The abhorrent behavior of the Chinese government was highlighted in recent events, so YC decided to pull the plug. Perhaps change in leadership also played a role in this. There is definitely an up-tick in public outrange in the West vis-a-vis China.
If they overtly offend China this would negatively impact YC current portfolio companies, discourage current/future LP, and other make their business more difficult. So they went with an intermediate approach.
I agree with you. It's a tragedy of the commons, no one want to be "the one" who offends China if all their competitors do not. It's the same thing that drove the mad rush for Chinese market share.
However, despite realizing this problem, it is not clear what to do about it. Clearly, YC did not choose to become leaders on the issue.
>Yeah, no, I've read a newspaper in the last year.
Did you read one prior to Summer 2018? Because when YC decided to go into China, there were people in internment camps then too. This stuff didn't start last year: