BEIJING—While U.S. prosecutors declined to charge Liu Qiangdong after a sexual-assault investigation, the Chinese e-commerce billionaire faced biting criticism in China’s court of public opinion.

On Friday, authorities in Minneapolis said there were evidentiary problems that made it highly unlikely a sexual-assault case against the founder of online retailer Inc. could be proven beyond a reasonable doubt. A woman told police that Mr. Liu raped her, according to a recording of an interview she gave with police. Hennepin…

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