China targets monopolies in warning to keep big capital in check in 2021

Name: China GDP: economy grew by 4.9 per cent in third quarter of 2020
Uploaded: 2020-12-11T15:23:06.000Z
Duration: 1 min 47 s
Description: China GDP: economy grew by 4.9 per cent in third quarter of 2020

The Politburo says the country needs to prevent ‘disordered expansion of capital’ as the Communist Party counts down to its centenary

‘Demand-side’ reforms also needed to unleash domestic demand and create a sustainable home market

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China will implement a broad strategy of keeping economic growth “within a reasonable range” for 2021, according to a meeting of the Politburo chaired by President Xi Jinping. Photo: Reuters

Zhou Xin

Published: 11:23pm, 11 Dec 2020Updated: 11:39pm, 11 Dec 2020

In a veiled jab at China’s sprawling big capital firms, China’s Politburo said on Friday that the country should do more to tackle monopolies and prevent “disordered expansion of capital”, according to a report by state news agency Xinhua.

Along with efforts to improve oversight and regulation, the country will implement a broad strategy of keeping economic growth “within a reasonable range” for 2021 – the year the ruling Communist Party celebrates its centenary – while expanding domestic demand and strengthening China’s strategic technology.

The meeting of the supreme policy-making body chaired by President Xi Jinping also decided that China must prevent any “scaled rebound or imports” of the coronavirus in this winter, signalling that China will continue to be strict in its border controls.

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China GDP: economy grew by 4.9 per cent in third quarter of 2020

This is the first time that the Politburo has specifically targeted the “expansion of capital”, reflecting Beijing’s growing unease about the potential social consequences of big tech and capital.

The risks of the combination were apparent in the closure of thousands of peer-to-peer lending platforms as well as the recent downfall of Danke, an online property rental platform that left in its wake tens of thousands of angry young tenants in big Chinese cities.

Tang Jianwei, an economist at Bank of Communications, the fifth-biggest lender in China, wrote in a note that Beijing was trying to push big tech firms to focus on “basic scientific research” that would strengthen the country instead of generating profits through monopolised services.

“Big tech firms with massive data and advanced algorithms must shoulder more responsibilities and spend more on original and fundamental technology innovation,” Tang said.

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