Wednesday, October 27, 2021

China: The world’s billionaire factory cracks down

The era of unlimited profits for China and it’s millionaires seems to be coming to an end.

The contrast between social media tycoon’s Instagram-video posted on July 4th and large-scale event in China couldn’t be more obvious. A few hours later, Beijing regulators had banned Didi Global Inc.’s ride-sharing service in the app store. This was a response to Zuckerberg and his American counterparts. This group once seemed destined to challenge the number one global wealth ranking. The latest blow from the business elite.


Policymakers are tightening the regulation of most important aspects of Asia’s largest economy. From financial services to Internet platforms to the data that supports, most of the large companies in modern China. In the most recent joint issue, regulators issued new draft rules on Saturday. This now requires almost all domestic companies to undergo cybersecurity review before listing in foreign countries.


The motives for Beijing’s repression were varied. These include concerns about anti-competitive behavior in the technology industry. Moreover risks to financial stability from loosely regulated lending platforms, and rapid proliferation of personal information by large companies are there.


In addition to Beijing’s determination, the Chinese public is increasingly concerned about growing inequality. In his important speech on the economic plan in October, President Xi Jinping acknowledged the “imbalance” of national development and said that “common prosperity” should be the ultimate goal.


The result is a new era of national billionaires and the investors who support them. The new script of China’s super-rich calls for more respect for the Communist Party, more charitable donations, and more attention to the well-being of ordinary employees, even if it hurts the bottom line.
E-commerce giant Pinduoduo has come under scrutiny for endless working deals. Some people regard this as an implicit criticism of the government.

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