Editorial of the “World”. The reinforcement of Chinese high-tech by the Xi Jinping regime is not new, but it is taking on an unprecedented scale. In recent days, the flagships of the sector have undergone a serious regulatory tightening which has caused a wave of mistrust among international investors. While these companies hitherto promised attractive growth rates, the time is now for doubt. Within days, their market capitalization collapsed by several hundred billion euros.
The attacks against these Chinese Internet giants are all over the place. A few months ago, Jack Ma, the founder of Alibaba, the number one in electronic commerce, had already suffered the wrath of the regime, forcing him to abruptly renounce the IPO of Ant, its subsidiary specializing in financial loans.
Today, other companies are in the crosshairs of the government. Didi, the Chinese leader in chauffeured car services, has been the subject of an extensive cybersecurity investigation, bringing the company into disrepute in the aftermath of its stock market debut. For their part, companies in the private education sector must transform into non-profit corporations. As for video games, they are now considered by official propaganda as a “Opium of the people”. Tencent, which achieves a third of its turnover in this activity, fell heavily on the stock market.
To justify its regulatory offensive, Beijing says it wants to fight against barriers to competition, while ensuring the security of personal data and respect for user rights. The wording is surprising from a power that multiplies invasions of privacy to establish its own political monopoly.
Blurred outlines
Moreover, it is legitimate to wonder about the value to be given to competition law in a country where the rules can change from week to week depending on the interests of political power. As for national security, invoked all the time, the contours are so vague from a legal point of view that they give free rein to all interpretations.
The priority would now be to “Reduce the financial burden on households” at the expense of the growth of web stars. Behind the laudable objective of protecting the rights of the collaborators of these platforms, the purchasing power of parents concerned with the education of their children or the interests of small businesses in the face of the power of the Internet mastodons, the regime seeks above all to control a sector whose autonomy and power are increasingly seen as a threat to the supremacy of the Chinese Communist Party and the stability of the regime.
That high-tech is under increasing government scrutiny is not unique to China. For years the European Union and, more recently, the United States have sought to regulate the sector. The difference is that this takeover takes place within the framework of the rule of law, sometimes at the cost of long and tedious procedures but which guarantee respect for private property.
Xi Jinping has chosen another, more radical path. Western investors must more than ever ask themselves the question of the compatibility of the nature of the regime with the functioning of a market economy. In China, it tends to turn into a shadow theater.