The Chinese government has vowed to increase its support for internet giants and their online payment units after it ended an 18-month regulatory storm against the tech sector last month.
Major payment and fintech platform enterprises should be supported to better serve the real economy and smooth out the “dual circulation” of domestic and international markets, said Chinese President Xi Jinping, also general secretary of the Central Committee of the United Nations. Communist Party of China (CPC) and chairman of the Central Military Commission, said an economic summit meeting on Wednesday.
Shares of Alibaba Group were up 6.4%, closing at HK$108 (US$13.76) on Thursday, while Tencent’s shares were up 1.35% to HK$375 on Thursday. Hang Seng Index, a benchmark of Hong Kong’s stock market, rose 1.26% to 21,273.
However, Beijing also stressed the need to strengthen oversight of the internet platform economy. On Thursday, the National Radio and Television Administration and the Department of Culture and Tourism jointly released a set of new guidelines to regulate the behavior and performance of web hosts, or so-called Internet celebrities, to prevent the spread of false social value.
Shares of Chinese internet giants have lost at least half their value since the Chinese government began tightening rules for the internet economy sector in late 2020.
The regulatory storm began with the cancellation of Ant Group’s planned $37 billion IPO in the United States in November 2020 and later hit many other internet companies, including Tencent, ByteDance and Didi, with stricter antitrust, privacy, tax and security laws. work rules.
Shares of Alibaba Group have fallen by about 70% from October 2020 to last month. Shares of Tencent fell from their historic peak between February 2021 and last month.
Curbs began to ease after Prime Minister Li Keqiang said in an April 27 meeting of the State Council that China would promote the development of its platform (Internet) economy to create more jobs and revitalize the general economy. Li said on May 18 that the central government was supporting measures by companies in the industry to go public locally or abroad.
Li Daokui, a former adviser to the People’s Bank of China, also said on June 3 that restrictions on the technology sector had effectively ended.
At its 26th meeting on Wednesday, the Central Comprehensively Deepening Reforms Commission approved four documents aimed at accelerating the construction of basic data systems, improving work in administrative departments, conducting pilot reforms of the evaluation of scientific and technological staff and strengthen supervision of an important payment platform enterprises.
To ensure national data security and protect personal information and commercial secrets, it was important to build basic data systems in national development and security and strengthen the real economy with more efficient data circulation and use, Xi said at the meeting.
China would strengthen the centralized and unified leadership of the CPC Central Committee on work related to administrative divisions, ensure solid overall planning and prevent unregulated and disorderly acts, he added.
Xi also stressed the importance of building a scientific and technological personnel evaluation system that focuses on innovation, competence and contribution. He said the country would improve regulations, strengthen institutional weak links, ensure the security of payment and financial infrastructure, and protect and neutralize potential systemic financial risks.
Li Keqiang, Wang Huning and Han Zheng, members of the Standing Committee of the Politburo of the CPC Central Committee and deputy heads of the Central Committee for Deepening General Reform, also attended the meeting.
The meeting said that China had already enacted the Data Security Act and the Personal Data Protection Act, and had actively researched and promoted the marketing of data elements. It said the country would further promote digitization to upgrade its industries and improve social governance.
“Our country has the advantages of data scale and application,” the meeting said. “We will accelerate the building of a digital economy with data as the main production factors and clearly define the properties and rights to use and establish a trading system for all data sources.”
The term “data factors”, which refers to data with economic values, has been commonly used in official statements since the CPC first categorized “data” as a factor of production, along with traditional ones, including manpower, capital, land, knowledge, know-how, and management. , in October 2019.
Last November, China launched the Shanghai Data Exchange in an effort to achieve breakthroughs in the recognition, pricing, traceability, market access and regulation of big data products.
Earlier this week, some Chinese internet users in Guangdong complained that they were allowed to withdraw only 1,000 yuan (US$149) per day from their bank accounts as a counterbalance to online scams. Some political commentators argued that the government wanted to encourage people to use online payments so they could easily track all transactions and financial activity.
By leveraging China’s rapidly developing digital infrastructure and supportive policies, many industrial companies are increasing the use of digital assets to improve efficiency, Karl Shen, a director of business ratings division at Fitch Ratings (Beijing) Ltd, said in a statement. research report. †
Shen said some traditional non-tech companies, such as electronic maker Midea Group and miner Yankuang Energy Group, have reduced human involvement and improved efficiencies with their digitization strategies.
He said more and more companies would increase their digitization spending, although such spending would remain small relative to the capital expenditures and profits of their core businesses.
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