Chinese Regime Tightens Political Control of Internet Giants
BEIJING—The Chinese Communist Party (CCP) is tightening political control over China’s internet giants and tapping their wealth to pay for its ambitions to reduce reliance on U.S. and European technology.
Anti-monopoly and data security crackdowns starting in late 2020 have shaken the industry. Investor jitters have knocked more than $1.3 trillion off the total market value of e-commerce platform Alibaba, games and social media operator Tencent and other tech giants.
The CCP says anti-monopoly enforcement will be a priority through 2025. It says competition will help create jobs and raise living standards.
The CCP seems likely to stay the course even if economic growth suffers, say businesspeople, lawyers, and economists.
Lester Ross, head of the Beijing office of law firm WilmerHale, said that Chinese leaders don’t want to reimpose direct control of the economy but want private sector companies to align with the CCP’s plans.
“What they are worried about is companies getting too big and too independent of the party,” said Ross.
Chinese internet companies and their billionaire founders, including Alibaba Group’s Jack Ma and Tencent Holdings’ Pony Ma, are among the biggest global success stories of the past two decades. Alibaba is the biggest e-commerce company, while Tencent operates the popular WeChat messaging service.
But party plans emphasize robots, chips, and other hardware, so these companies are rushing to show their loyalty by shifting billions of dollars into those.
The CCP’s campaign is prompting warnings the world might decouple, or split into separate markets with incompatible technology. Products from China wouldn’t function in the United States or Europe, and vice versa. Innovation and efficiency would suffer.
U.S. curbs on Chinese access to telecom and other technology haven’t helped.
Alibaba said it will invest $28 billion to develop operating system software, processor chips, and network technology. The company has pledged $1 billion to nurture 100,000 developers and tech startups over the next three years.
Last year, Tencent promised to invest $70 billion in digital infrastructure. Meituan, an e-commerce, delivery and service platform, raised $10 billion to develop self-driving vehicles and robots.
https://www.ntd.com/chinese-regime-tightens-political-control-of-internet-giants_684164.html