Uber found a winning game plan. (Lucy Nicholson/Reuters)

The state of the stock markets in China looks rocky, but China as a market continues to look rock solid for American companies hungry for growth.  With its under-tapped middle class – estimated to reach over 850 million by 2030 by some measures — it is hard to imagine how businesses can enjoy long-term global growth without a strategy to crack China. According to the U.S.-China Business Council, China represents, at least, a $300 billion market for American companies. It is no surprise, therefore, that for a staggering 93 percent of businesses surveyed by the Council, China was among the top five priorities – and the very top priority for 22 percent.

That said, few companies have expressed their enthusiasm for China with as much exuberance as Uber, the car hailing app; it is the latest brand to be elevated to verb status, in cities around the world, and, remarkably, even in China.  According to a recent email from CEO Travis Kalanick, “China now represents the largest region outside the U.S. and, at the current growth trajectory, will most likely surpass the U.S. before year-end.” According to data in the same email, the Chinese city of Chengdu alone was 479 times as large as New York in terms of Uber trips at the same age of nine months.

While there is disagreement about its numbers — its own estimates of a million rides a day are disputed — what is not in dispute is that Uber may have achieved the seemingly impossible: as a tech company in the business of consumer data collection, it has cracked the Chinese market. In the meantime, the traditional data giants, Facebook, Google, Twitter, Amazon, have been shut out of China or are barely surviving.

The players that have made inroads are those in the hardware business, Cisco in B2B and Apple with their hugely popular phones. But even these players are facing headwinds as they get into data collection. Both Cisco and Apple were dropped from the Chinese government’s approved technology vendors list, after the Edward Snowden leaks about the NSA accessing data from U.S. technology and communications companies.

Foregoing the Chinese market for America’s digital giants would be a giant lost opportunity. Not only is China the world’s largest online market, it is also the country that is the fastest in terms of its digital evolution among the 50 countries that we have studied and “indexed.”  A natural question for every tech CEO should be: how did Uber scale the Great Digital Wall of China? What did it figure out that even Facebook or Google could not fathom?

Uber has tapped into a deep reservoir of unmet need: the demands on the transportation systems are growing in China’s burgeoning cities, and as is the case elsewhere, the existing taxicab system is over-stretched and the customer experience is unsatisfactory. In the meantime, the Chinese urban consumer is increasingly facile using mobile phones for a variety of needs, so the idea of using an app to locate a car or taxi with better service is an easy transition.

Despite this, Uber’s ride through the Middle Kingdom has not been a smooth one. Apart from having its Guangzhou offices raided by the authorities and perpetual protests from local taxicab drivers, fraudulent claims from fake “rides” with the intent of getting Uber’s generous subsidies, and being locked out of the most popular messaging platform, WeChat, it is locked in a battle for market share with a newly formed formidable coalition of former home-grown rivals, Didi Kuaidi. All of this makes Uber’s inroads even more remarkable. I attribute its success to a three-step choreography:

1. Jive with the locals.

In Feb. 2014 Uber started operations in China in an organic organization, Youbu, which translates into “An Excellent Step Forward.” It was a low-key, localized entry designed to fly under the radar. The UberX analogue, People’s Uber, followed in Oct. 2014 as a non-profit. Prices were kept low, with the focus on enabling a local entrepreneurial economy that would grow loyal to Uber; this was accomplished through very generous subsidies to the drivers from Uber’s venture capital-funded deep pockets.

Other than the keepers of the status quo and local regulators, everyone else was happy: the consumers got cheaper, more convenient rides, generally with better service and drivers had an opportunity to build their small businesses. Other innovations complemented other entrepreneurs; for example, Uber’s offer of a free ride to e-commerce company, Kaola.com consumers who would ride and get free samples of Kaola.com products. The strategy: even though local governments and municipal authorities would be miffed, once support within an ecosystem of consumers and newly-enabled entrepreneurs reaches critical mass, it is difficult to put the genie back in the bottle.

2. Tango with a giant

China has three data giants, the triumvirate known as BAT: Baidu, Alibaba and Tencent. Baidu’s strengths are from its trove of data based on user search, Alibaba has data on online purchases, credit and payments while Tencent’s depth is in social network data. Sixty percent of a Chinese mobile user’s time is spent on the app of one these players.

While each has its core strengths, over time their markets are converging. Two out of the three had a stake in the car-hailing business — Alibaba-backed Kuaidi Dache and Tencent-backed Didi Dache, which merged to become Uber’s biggest nemesis, Didi Kuaidi — leaving Baidu solo and without a dance partner. The resolution: Baidu invests in Uber and promotes it on its maps and mobile search products. In addition to giving Baidu a competitive lever against its arch rivals, Alibaba and Tencent, the tie-up helps Uber benefit from the political connections of being affiliated with one of the BAT giants.

3. Toe the line

Finally, no prescription for success in the Chinese market can be complete without a plan for managing the true source of political power: the Chinese government. As protests by taxi drivers erupted in multiple cities across China, Uber recently acknowledged its commitment to “maintain social order” by using its GPS data to track drivers and their locations near protests and canceling their Uber contracts if they were near such protests – a strong signal to the government that its cache of data could be used for the “social order maintaining” objectives of the state.

In sum, Uber’s is a strategy that deftly aligns incentives of the key stakeholders: consumers, entrepreneurs, a powerful incumbent private sector player and the state.  Each set of incentives is tied to satisfying the needs of the others as well. Thus, against all odds, Uber ensured that the country that was once won through a “Great Leap Forward” can be won by “An Excellent Step Forward.” The excellence, in truth, is not in a single step but many coordinated steps forward. This is a dance that few from Uber’s Silicon Valley tribe have mastered.  They would do well to study the moves and which of these they are prepared to emulate, adapt or forgo.

Bhaskar Chakravorti is senior associate dean of International Business & Finance at Tufts University’s the Fletcher School. He’s also the founding Director of the Institute for Business in the Global Context and author of The Slow Pace of Fast Change. Formerly a partner at McKinsey, he taught innovation at Harvard Business School. He is a member of the World Economic Forum’s Global Agenda Council on the Economics of Innovation.