By Beiyi Seow
China’s recent clampdowns on a range of industries including tech firms and the education sector will not detract from its goal of opening up the economy, state media said Wednesday, as Beijing rushes to reassure rattled investors.
Sweeping regulatory changes over the past months have targeted everything from monopolistic behaviour to data security, rattling share prices and wiping billions off companies’ valuations.
Authorities have ordered some of China’s biggest tech firms to stop “disorderly expansion”, scuppered the bumper listing of financial giant Ant group, and launched a series of antitrust and cybersecurity probes.
A fresh push by President Xi Jinping targeting the country’s uber-rich and calling for “common prosperity” has added fire to public debate, as have moves to tighten oversight of pop culture.
But a widely shared article by a well-known blogger calling the clampdowns a “profound revolution” has prompted a scramble by public figures and state media to counter growing fears that the changes amount to a second Cultural Revolution.
“Opening to the outside world is China’s basic national policy, and this will not waver at any point,” a front-page People’s Daily editorial proclaimed on Wednesday.
“Unswervingly, the principles and policies of encouraging, supporting and guiding the development of the non-public sector of the economy have not changed,” the state outlet added.
The editorial on Wednesday added that the regulations are to guide enterprises to obey the ruling party’s leadership and serve the country’s broader interests of economic and social development.
Its timing also sends a message that authorities recognise “the significance of the private economy and private tech companies… and will continue to have their back”, said Ether Yin, a partner at consultancy Trivium China.
“The crackdown is a correction of previous regulatory lapse and (marks) the pains of growing up,” he added.
And Feng Chucheng, at research firm Plenum, said: “I think there is a lot of misunderstanding in terms of what Beijing really wants to achieve with its latest regulatory actions.”
On Wednesday, China’s foreign ministry defended the government’s regulatory moves, saying they were aimed at promoting “the fair, orderly and sustainable growth and development of China’s economy”.
Observers believe Beijing is trying to ease the fears of foreign investors.
Business groups have warned that China’s business environment had become more politicised last year.
“The Chinese Communist Party has some very ambitious techno-nationalist goals that it has not yet reached,” said Hinrich Foundation research fellow Alex Capri.
“It still needs outside investors, it still needs technology transfers,” he said. “The end game is still going to be self-suffiency… but they have to spin this very carefully.”
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