Editorial | New era begins for China’s reined-in tech giants

The tech giants and their so-called platform economy have been reined in. Their tycoons have been put in their place.

Two years after regulators launched a crackdown on “new economy” businesses, including their “Wild West” shadow banking, Beijing is ready to call it a day.

The importance of the industry has been reaffirmed; it can expect official support from now on. Official statements declare a readiness to normalise regulation, and encourage operators to “display their capabilities in bolstering growth, job creation and competitiveness”.

All that, though, has been done at an enormous cost. Roughly US$2 trillion in market capitalisation has been wiped out from the listed parents of the 13 platform companies between late 2020 and the start of this year.

Back then, platform enterprises – technological ecosystems that share data, traffic, user information with antitrust implications – had grown unruly as they expanded rapidly. Beijing rightly saw the need to bring them to heel, not only to protect the economy and consumers, but also to ensure sustainable growth.