Decrypting China’s Big Tech Crackdown – Part 1
13 September 2021
Being the top two valuable companies of China, Alibaba and Tencent have become the prime target of the current crackdown. Top executives of many tech companies, including the boss of Alibaba – Jack Ma and CEO of Tencent – Pony Ma, were summoned by regulators to conduct self-examination. Surprisingly, few tech tycoons have also abruptly announced their retirements, such as Pinduoduo’s Colin Huang, Bytedance’s Zhang Yiming, and real estate major Soho Group’s Pan Shiyi and Zhang Xin. Alibaba, Tencent, Didi, and seven other tech giants issued public pledges to obey anti-trust laws. The overall response of all the tech firms under scrutiny is utterly submissive, unlike their foreign counterparts.
Amidst the ongoing turmoil, many tech firms have reportedly shelved their foreign IPO intentions after the CAC rolled out a new policy draft stipulating mandatory security review for any domestic company with more than 1 million users seeking to list on public markets overseas. China has tightened data regulations for other companies as well. New documents from China’s State Council and the Chinese Communist Party’s Central Committee indicate that the crackdown will continue. Cyberspace Administration of China and China Securities Regulatory Commission are now aiming for online stock manipulators. Reuters reported, CBIRC plans to step up scrutiny of online insurance companies. The current wave of the crackdown has unnerved investors in the healthcare sector. It is a matter of time to see what’s next – gaming, advertising, real estate, or something else.