Beijing’s intervention in Chinese markets, including tech, could strangle ‘economic dynamism’, author says
- Book on China’s tech regulations and economic governance assesses impact of perceived overreaching in the market, with far-reaching effects flagged
- Channelling funds into hard tech risks a new ‘overcapacity problem’ like China is seeing in its EV and solar-panel industries, professor Angela Zhang explains
China’s regulators should strike a delicate balance to empower the nation’s tech firms to secure a competitive edge in the high-stakes tech race with the US while avoiding unexpected repercussions from overly stringent interventions, according to a scholar.
Angela Zhang, an associate professor in law at the University of Hong Kong, also said the US’ tech-containment strategy could ultimately backfire, as it is just a matter of time before China catches up and gains leverage in the realms of semiconductors and artificial intelligence.
In her new book, High Wire: How China Regulates Big Tech And Governs Its Economy, Zhang said some critics contend that Beijing’s legal campaign against tech firms casts “a bleak outlook not only for China’s tech sector, but for its economy as a whole, warning that the crackdown is driving China into the unknown and will strangle its greatest source of economic dynamism”.
The shift of control also provides opportunities for more state participation in the industry that weakens the influence of private tech giants, Zhang explained in an interview with the Post.
It seems like a good intention to rechannel resources … But it creates a lot of unintended consequences
But in the face of a national economic slowdown and heightened tech war with the US, central leadership said in late 2022 that the government would support internet companies to reach their full capacity to support growth, create jobs and take part in global competition, signalling an end to the crackdown.