Is China Ending Its Crackdown on Big Tech?... Moving to Promote Internet Platforms

Prime Minister Li Chang Calls Officials for Encouragement
Mentions Plans to Improve Regulatory System

Li Chang, Premier of the State Council of China, called representatives of major internet platform companies and promised support such as regulatory improvements. This is interpreted as an effort to encourage big tech (large information technology companies), which had been subject to high-intensity regulations, to help revitalize the economy.

According to Caixin, a Chinese economic media outlet, on the 12th, Premier Li held a roundtable meeting by gathering representatives from platform companies such as Meituan, a delivery and ride-hailing application, Douyin, a video-sharing site, and Alibaba Cloud, a cloud computing company.

[Image source=Yonhap News]

At the meeting, Premier Li praised the attendees, saying, "The platform economy emerged in response to the demands of the times, creating new spaces for expanding demand and providing new engines for innovation and development," adding, "It has introduced new channels for employment and entrepreneurship and also supports public services." He continued, "On the journey to comprehensively build a socialist modern country, the platform economy holds great potential," and said, "I hope that the majority of companies will maintain firm confidence, hone their internal strength, continuously promote innovation and breakthroughs, and provide more power to the development of the real economy."

He also emphasized, "The government will create a market environment for fair competition and improve policies such as investment access, new technology, and new business security assessments," adding, "Efforts should be made to improve the regulatory system to be transparent and predictable and to reduce the operational costs of corporate compliance."

The roundtable was held five days after Chinese financial authorities imposed a fine of 7.123 billion yuan (approximately 1.2709 trillion won) on Ant Group, the fintech company of e-commerce giant Alibaba, and its subsidiaries, applying the Anti-Money Laundering Law and the Banking Supervision and Administration Law on the 7th.

In the market, there were interpretations that this removed uncertainties regarding China's crackdown on big tech, and the roundtable was actually evaluated as a move by the relevant authorities to support and encourage companies instead of enforcement and regulation. According to a Deloitte report, the scale of China's platform economy is expected to reach 100 trillion yuan by 2030. Amid recent economic slowdown and concerns about stagnation, the government appears to have judged that consumption-inducing strategies by related companies are important.

Pan Helin, director of the Digital Economy and Financial Innovation Research Center under the International Business School at Zhejiang University, told the Global Times (GT), "China's senior policymakers value platform companies, expecting strong growth and contributions from them," and explained, "They need to focus not only on profit generation but also on ideas and actions that help the real economy."