Beijing tightens grip on tech giants
Xi Jinping maintains they are too big and influential and must be downsized. Tencent and Alibaba the first targets. The Chinese authorities want to break the monopolies in the hi-tech sector. Media investments are also targeted. Like Jack Ma, those who challenge Xi "retire" to work for charity.
Beijing (AsiaNews) - The Chinese Communist Party is clamping down on the national tech giants, considered too large and influential, and therefore a danger to the regime.
State television CCTV reports that Chinese President Xi Jinping yesterday ordered the competent authorities to control the activity of the internet giants, putting an end to monopolies in the sector and promoting "fair competition".
On March 12, the State Market Regulatory Administration fined 12 major hi-tech companies, including Tencent, Baidu, Didi Chuxing and SoftBank, for violating anti-monopoly rules. After the announcement, Tencent lost € 52 billion on the stock market.
Tencent owns WeChat, a messaging social network with more than a billion users, which also has a version for web payments (competitor of Ant Group). The hi-tech group of Pony Ma, one of the richest men in the country, also has interests in the banking, insurance and entertainment sectors.
Investors fear that Tencent will be targeted by national authorities similarly to Alibaba, the e-commerce multinational founded by billionaire Jack Ma.
In November, the Chinese government blocked the stock exchange listing of Ant Group, the financial arm of Alibaba. The listing, the highest in history (33.7 billion euros), was suspended because Ant's activity was not in line with the new government rules on the granting of micro financing through web platforms.
Several observers note that the leadership did not like Ma's words on October 24, when he attacked the country's financial and banking system in a public speech.
In December, the government announced the launch of an anti-trust policy as one of the economic priorities for 2021. The same month, authorities fined Alibaba and Tencent for failing to disclose deals with which they acquired smaller competitors in advance.
To limit the weight of large groups, it seems that the authorities are aiming to break up their activities. According to the Wall Street Journal, which cites sources familiar with the dossier, the government has ordered Alibaba to divest the media it controls. The company owns the South China Morning Post and has shares in Weibo, China's Twitter.
Ant Group is also committed to restructuring its digital payments business, so that it complies with the same rules on capital observed by traditional banks, as requested by the authorities. Simon Hu, Ant's chief executive, resigned however on March 12. He wanted to transform Alipay, the company's main asset, into a large "online shopping mall" capable of providing loans, tourist services and ensuring home delivery. Like Jack Ma, Hu will now dedicate himself to "charity": the landing place for those who become uncomfortable in the eyes of Xi Jinping.