Editorial | The crackdown on Big Tech will ensure future healthy growth
- It is undeniable that the rapid growth of the Chinese digital economy has exposed regulatory loopholes and, as Xi Jinping warns, threatened the country’s economic and financial security and stability
The future of China’s economy is digital, but its enormous wealth and benefits must be spread out to everyone, not just a few big tech companies. That’s the message from President Xi Jinping, in a 3,000-Chinese character essay signed with his own name.
With an economy on course to become the world’s largest, big data, cloud computing and artificial intelligence will play a big role, wrote Xi. New developments will include 6G telecommunications. This blueprint as spelt out in the essay is in line with Xi’s speech on the digital economy last October and is explained further in more technical details in a master plan laid out by the State Council.
In 2020, China’s digital economy expanded by 9.7 per cent to 39.2 trillion yuan (US$6.2 trillion), equivalent to 38.6 per cent of China’s economic output.
But beyond the purely technical, Xi helps put the crackdown on Big Tech within the past two years in perspective. The crackdown, which has wiped out US$1 trillion of value from their stocks, is often interpreted in the West as the communist state’s fear of losing control over the digital economy, including online banking. But that is too simplistic, a projection of Western business priorities and assumptions over Chinese ones.
Beijing has made it clear profit is not the only or the ultimate goal of business; “common prosperity” or spreading the wealth is. To this end, monopolistic practices and market dominance can no longer be tolerated. Many foreign critics have countered that China’s capitalist take-off in recent decades has also created one of the most unequal societies in the world.