Beijing signals two-year internet crackdown may be over

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told state media that the government had concluded a campaign to “reform the financial business of 14 platform companies”, with only minor problems left to resolve. Mr. Guo, also party secretary of the People’s Bank of China, said in the interview published on Saturday that officials would work toward providing more support to tech companies and making supervision of the tech sector more predictable going forward.

Over the weekend, financial-technology giant Ant Group Co said Chinese billionaire Jack Ma would hand over control of the company. Ant, which is one-third owned by Alibaba Group Holding Ltd. and operates popular mobile-payments platform Alipay, has been ramping up its operations since Chinese regulators forced it to cancel a blockbuster initial public offering in November 2020. is overhauling.

China’s sweeping dominance of its previously booming and freewheeling internet sector has trapped companies such as Alibaba, Meituan and Didi Global Inc since the late 2020s. trillion in market value from China’s largest publicly listed tech firms.

The Hang Seng Tech index, a sector-focused benchmark that includes Chinese internet giants such as Alibaba, Tencent Holdings Ltd and Baidu Inc, rose 3.2% in Hong Kong on Monday.

Alibaba’s stock jumped 8.7% on Monday. Shares of China’s largest e-commerce provider are up 80% from multi-year lows due in October 2022. Still, they remain only about a third of their record highs reached just before Ant’s canceled IPO, when Alibaba’s market capitalization approached $900 billion.

Mr Guo, whose commission oversees China’s banking and insurance activities, said the regulators aim to “encourage platform enterprises to operate in compliance with regulations and play a major role in leading growth, job creation and international competitiveness”. Is.” The highest-ranking Chinese official recently publicly remarked that the government could end its crackdown on the tech sector.

Regulators began to soften their tone in early 2022, as Beijing-led policies with zero tolerance for Covid-19 and its efforts to rein in Internet firms took a toll on China’s economic growth and pushed Chinese stocks higher. Sales worsened. In March, China’s economic czar, Liu He, said during a meeting with other policy makers that regulations should be implemented in a transparent and predictable manner, specifying that any policy affecting the market must first be approved by the financial institutions. should be coordinated with the regulators.

Last month, in an internal meeting immediately after the Communist Party Congress, the head of China’s top economic-planning body, the National Development and Reform Commission, also called for government policies to focus on promoting growth, including through the private sector. It also involved building trust. real estate sector.

In recent weeks, government officials have begun reviewing policies for the technology and education sectors, and are preparing to wrap up a long-running investigation against its Internet companies, people familiar with the matter said. .

Mr. Guo’s comments come after rules were relaxed in late December to allow domestic gaming companies to bring in imported videogame titles. This follows changes from earlier last April when China’s videogame regulator resumed granting publishing licenses to domestic gaming titles after a month-long freeze.

On December 30, China’s securities regulator said two Nasdaq-listed online brokers violated domestic laws by allowing mainland-based clients to trade in stocks listed on overseas exchanges. It has acquired companies, Up Fintech Holding Ltd. and Futu Holdings Ltd. Promoted selling of American Depository Receipts. Still, some market participants said the regulator’s statement indicated it was under investigation into the two firms, and Chinese stocks rose broadly. This year so far has been in part due to optimism that the worst is over for the tech sector.