(Bloomberg) – China’s top leader has warned that Beijing will go after so-called “platform” companies that have accumulated data and market power, a sign that the crackdown on months in the country’s internet sector is just beginning.
President Xi Jinping chaired on Monday a meeting of the Communist Party’s chief financial advisory and coordination committee, ordering regulators to step up supervision of Internet companies, crack down on monopolies, promote fair competition and prevent disorderly capital expansion. , according to the state broadcaster CCTV. Internet companies need to increase data security and financial activities need to be under regulatory supervision, CCTV said.
The unusually strong comments from Xi and his lieutenants suggest that Beijing is preparing to expand a campaign to curb the influence of its largest and most powerful private companies, which until now have mainly focused on Jack Ma’s Alibaba Group Holding Ltd. and its affiliate Ant Group Co. The term platform savings can be applied to a multitude of mobile and Internet giants offering services to hundreds of millions, from giant Didi Chuxing to food delivery giant Meituan and e-commerce leaders like JD .com Inc. and Pinduoduo Inc.
“Some platform companies are developing in a non-standard way and that presents risks,” said CCTV, citing the minutes of the meeting. “It is necessary to accelerate the improvement of the laws that govern platform economies to fill gaps and gaps in a timely manner.”
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The report came days after Bloomberg News reported that government watchdogs were now keeping an eye on Tencent Holdings Ltd.’s more than $ 100 billion financial empire after ordering a reform of the Ant. Leading financial regulators see Tencent as the next target for greater oversight, according to people with knowledge of their thinking. Like Ant, Tencent is likely to be required to establish a financial holding company to include its banking, insurance and payments services, one person said, seeking anonymity because the discussions are private.
The two companies will set a precedent for other fintech players to comply with stricter regulations, people added. Such a move would mark a significant escalation in China’s campaign to curb the influence of its tech tycoons, which began last year with the sinking of Ant’s $ 35 billion initial public offering and the publication of new antitrust regulations that govern companies. of technology.
Read more: China’s Politburo promises to strengthen anti-monopoly efforts
Tencent lost more than $ 65 billion in value in the two days following the report, although its shares rose more than 1% on Tuesday.
The development of China’s platform economy is currently at a crucial stage, Xi said at Monday’s meeting. It is necessary to focus on the long term, strengthen the weaknesses and create an innovative environment to promote the healthy and sustainable development of the platform economy, he added.
The semi-regular meeting of the Party’s main financial oversight group generally helps to set the tone and direction of national policy. During his last meeting in September, Xi focused on the so-called “dual circulation” approach of relying on international and domestic consumption and production to boost the economy.
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