(Bloomberg) – China’s top leader has warned that Beijing will move to so-called “platform” companies that have amassed data and market power, a sign that the months-long repression of the country’s internet sector is only just beginning.
President Xi Jinping chaired a meeting of the Communist Party’s top advisory and coordination committee on Monday, urging regulators to step up surveillance of Internet companies, fight monopolies, promote fair competition and prevent the disorderly expansion of capital. , according to state broadcaster CCTV. . Internet companies need to improve data security and financial activities need to come under regulatory oversight, CCTV also reported.
The extraordinarily strongly worded remarks of Xi and his lieutenants suggest that Beijing is preparing to expand a campaign to limit the influence of its largest and most powerful private corporations, which so far have focused mainly on Jack Ma’s Alibaba Group Holding Ltd. and its subsidiary Ant Group. The term platform economies can apply to a plethora of mobile and internet giants offering hundreds of millions of services, from the rocky Didim Chuxing to the giant Meituan and food leaders like JD.com Inc. and Pinduoduo Inc. .
“Some platform companies are evolving in non-standard ways and that involves risks,” CCTV said, referring to minutes of the meeting. “It is necessary to accelerate the improvement of laws that apply to platform economies in order to fill gaps and loopholes in time.”
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The report comes days after Bloomberg News reported that government watchdogs are now targeting Tencent Holdings Ltd. ‘S funding empire of more than $ 100 billion, after they ordered an overhaul of Ant. According to people with knowledge of their thinking, Tencent sees the biggest financial regulators as the next target for increased oversight. Like Ant, Tencent will probably be expected to set up a financial holding company that will include its banking, insurance and payment services, one of the people said and wants anonymity because the discussions are private.
The two companies will set a precedent for other fintech players to comply with stricter regulations, the people added. Such a move would signal a significant increase in China’s campaign to curb the influence of its technological powers, which began last year with Ant’s initial public offering of $ 35 billion and the publication of new antitrust regulations. for technological enterprises.
Read more: China’s Politburo vows to strengthen anti-monopoly efforts
Tencent lost more than $ 65 billion in value in the two days after the report, although its shares rose more than 1% on Tuesday.
The development of China’s platform economy is currently at an important stage, Xi said at Monday’s meeting. It is necessary to focus on the long term, strengthen 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 largest financial supervisory group usually helps to indicate the tone and direction of national policy. During their last meeting in September, Xi focused on the so-called “double circulation” approach of relying on both international and domestic consumption and production to boost the economy.
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