China Hints at End of Crackdown on Tech Giants
Chinese tech giants might be seeing the end of the Chinese government's crackdown on them soon.
China Banking and Insurance Regulatory Commission Chairman Guo Shuqing recently said to state broadcaster China Central Television that he expects significant progress in the ongoing crackdown on tech giants before 2021 ends, hinting that the crackdown may be ending soon.
According to a Bloomberg article, Chairman Guo said that Chinese tech companies have been responding positively to feedback from government regulators and that about half of the proposed amendments have been implemented. He also added that he expects "even more significant progress" before the end of the year.
Even so, the Chairman said that despite the rectifications, unfair competition continues to persist in some areas of the country's financial industry. He vowed to implement strict regulations to break up monopolies, citing China's "zero tolerance" for illegal financial activities.
While there is no definite date for the end of the crackdown, Tom Masi, a portfolio manager at GW&K Investment Management, predicts that it may probably happen over the next few months, according to Bloomberg.
The crackdown on China's tech giants started when the Chinese government suspended the initial public offering of Jack Ma's Ant Group in November 2020 due to "risks associated with the rapid development of financial technology". Since then, other companies, including internet conglomerate Tencent, Didi, the world's largest ride-hailing firm, and e-commerce company Pinduoduo, have been in government regulators' crosshairs.
According to China experts, the crackdown was due to the Chinese government's desire to rein in their growing influence and to control the country's data, a "strategic asset" in China's showdown with the U.S. to exceed them in all dimensions.
In August 2021, government firms in China were instructed to use the state-owned asset cloud or "guoziyun" instead of using third-party managed cloud platforms to tighten their control on how companies store and manage the data they collect. Chinese Communist Party (CCP) Secretary and Hualu Group Chairman Ou Li wrote that digital data has a "critical importance" in China's overall competitiveness and the CCP's long and stable rule of China.
Written by John Paul Joaquin