Sharing economy a growth driver but restrictions need to be addressed, says Tencent chief

Pony Ma calls on central government to improve internet connections

PUBLISHED : Thursday, 03 March, 2016, 10:25pm
UPDATED : Thursday, 03 March, 2016, 10:25pm

The sharing economy will become a new growth driver of China’s economy but the current supervisory regime, which is the same as that of traditional industries, will restrict its development, Internet mogul Pony Ma Huateng said on Thursday.

Idle resources could be used more efficiently under the sharing economy which was developing rapidly supported by the internet and technology, Ma, the founder and chairman of internet giant Tencent, said.

“The service sector, which will see huge benefits from the sharing economy, will become a growth engine of China’s economy,” Ma, also a National People’s Congress deputy, said in Beijing.

Industries such as transportation and property would benefit from the sharing economy and change many people’s daily lives, said Ma, whose company is an investor in China’s largest car-hailing mobile application Didi Kuaidi.

The sharing economy still has considerable room for development in China
Pony Ma, Tencent

Such start-ups also helped create job opportunities, he said.

However, the current supervisory regime would restrict their development because the rules were framed according to the needs of traditional industries, Ma said in a proposal to the NPC.

He denied the proposal was made in favour of Didi Kuaidi, but said transportation was a good example of the sharing economy and had proved it could bring convenience to people’s lives.

“You can’t imagine that you always need to travel with a computer, and a driver cannot put a computer in the car as well,” he said. “This is the trend where we make our trips using mobile devices and technology.”

The legal status of Didi Kuaidi has been questioned and some taxi drivers have blamed use of the application for hurting their business.

Ma said the market size for the sharing economy was more than 1 trillion yuan last year, this compared with the more than 3 trillion yuan market size in the United States.

“The sharing economy still has considerable room for development in China,” he said.

There were some other problems limiting the development of the sharing economy such as network connections and cyber security, he said.

The government should boost internet infrastructure and improve the credit investigation system, Ma said. It should allocate more resources to improve internet connections, a significant element under the mainland’s Internet Plus strategy, he said,

The government should also invest in establishing 4G and Wi-fi networks as the rapid development in the internet industry would require a network with higher capabilities.

Internet Plus, a strategy first raised by Premier Li Keqiang last year, is the integration of the internet and traditional industries through online platforms and information technology. Amid China’s slowing economy, Internet Plus is expected to help economic restructuring and serve as a new growth driver.

The mainland’s economic growth slowed to a 25-year low of 6.9 per cent last year.

Over the past year, Tencent has signed strategic agreements with 13 provinces and regions and 45 cities following the government’s Internet Plus initiative.

“We are working with the local government in many areas such as medical and taxation,” Ma said.

Meanwhile, Tencent’s popular mobile messaging app WeChat has started to charge users on the mainland for money transfers made to personal bank accounts via its built-in digital wallet service.

Although its rival AlilPay still does not charge any fee, Ma said the charge was needed to cover costs as transactions had been rising faster than expected.