Chinese investors are used to interpreting the signals, before waiting for the consequences of the laws passed by Beijing. This is a reason why the Chinese stock market is down for the third day today. Yesterday it recorded -5% on Hang Seng index, and the sector of technology companies touched -8.7%, due to new restrictions that the government is imposing.
The wind in favor of large technology platforms seems to have changed. “Hit one to educate a hundred”, said Mao Zedong. It looks like what happened to Jack Ma, founder of Alibaba, one of the companies that has helped make the Chinese digital sector competitive in recent years. But he came out of the public news last year after he accused the Chinese public commercial banks of having a “pawn shop” mentality.
But it’s not just tech in spotlight:
New legislation has been made on how companies that deliver food at home, Meituan just to give an example, must protect the delivery men who work for them;
The obligation for those involved in private education and e-learning, a sector worth one hundred billion dollars, to register as a non-profit organization;
The suspension of the possibility of registering new accounts on WeChat, the Chinese Facebook headed by Tencent.
Then there was an unprecedented crackdown on overseas listed companies and the consequent disappearance from Chinese app stores of Didi Chuxing, the Chinese Uber, and its 25 subsidiaries.
As a result of these measures, many of these companies have lost a lot of value on the stock exchange. It would seem, to all intents and purposes, a multi-level political campaign against companies that have a dominant position on the market and that actually hold a monopoly on data, the oil of the 21st century as the Economist defined them.
Another attempt to get their hands on the field of data is to create the Chinese CBDC, the so-called digital Yuan. A clear interest in countering the power of Bitcoin and decentralized cryptocurrencies, which cannot be controlled. In fact due to the Chinese government’s crackdown on mining activities, in recent times, many Bitcoin miners have stopped their operations in the country. Most of them would be moving abroad, to places where electricity is cheap and the law is friendlier to them, such as Texas, the United States, Kazakhstan and Russia, which has recently been adopting cryptofriendly policies.
Brilliant Binance CEO Changpeng Zhao (CZ for friends) too, at the beginning of his story – that we will one day tell – tried to move to Japan, due to the Chinese government regulations against cryptocurrency exchanges.
What is certain is that Beijing is trying to weaken and fragment the technology monopolies. Perhaps fostering an environment that is more open to innovative small and medium-sized enterprises, which in any case are easier to control.
