The View | Beijing’s crackdowns usher in a new era of Chinese capitalism

Name: Tightened regulations among key trends shaping China’s internet in 2021
Uploaded: 2021-09-08T01:15:18.000Z
Duration: 9 min 40 s
Description: Tightened regulations among key trends shaping China’s internet in 2021

China is now at the stage of capitalism when market forces can’t be counted on to deliver upward mobility to the masses. So the state is stepping in to rebalance economic growth and income distribution

Reading Time:4 minutes

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Women walk by an electronic billboard showing China’s GDP index on a commercial office building in Shanghai, on August 24. Photo: AP

Winston Mok

Published: 9:15am, 8 Sep 2021Updated: 1:36pm, 21 Sep 2021

Recent Chinese government actions against big tech, tutoring companies and now online games have spooked international investors. Such sudden, draconian moves go beyond Beijing’s customary regulatory measures. However, could the harsh impositions be birth pains of a new era of capitalism with Chinese characteristics?

To see the winds of change, it may be useful to review the state of Chinese capitalism.

First, the private sector has been the key engine for innovation and growth, and provides the main base for employment. Second, the economy is open to foreign investment, albeit in a graduated manner, with restrictions in some sectors.

Third, the state dominated strategic industries such as banking, energy, transport, telecommunications and the media – until the emergence of big tech. Finally, local governments – much more than the central government – have played pivotal roles in promoting economic development.

The relative weights of domestic private, foreign-invested and state-owned sectors vary across regions. Zhejiang and Guangdong, where the private sector dominates, have achieved the fastest growth since economic reform began.

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Tightened regulations among key trends shaping China’s internet in 2021

In contrast, regions that were part of the state-owned industrial base, such as Shanghai and the northeastern provinces, have seen far slower growth.

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.css-1m2rp1p{color:#34b8b5;}The View | Beijing’s crackdowns usher in a new era of Chinese capitalism

The View | Beijing’s crackdowns usher in a new era of Chinese capitalism