China’s government to take ‘golden shares’ in Alibaba, Tencent to ensure influence over internet giants
- An arm of the Cyberspace Administration took 1 per cent of an Alibaba subsidiary in Guangzhou on January 4, according to corporate database Qichacha
- Discussions are underway about a similar stake in a Tencent subsidiary, a person familiar with the matter said
Chinese government entities are set to take so-called “golden shares” in units of Alibaba Group Holding and Tencent Holdings, suggesting Beijing is moving to ensure greater control over key players in the world’s largest internet arena.
The discussions are emerging as Beijing prepares to loosen its grip on the sector and move past a bruising crackdown that’s enveloped most every internet sphere for well over a year. That share structure, which in theory allows the government to nominate directors or sway important company decisions, could grant officials a tool to influence the industry over the longer term.
An arm of the Cyberspace Administration of China took 1 per cent of an Alibaba digital media subsidiary in Guangzhou on January 4, according to corporate database Qichacha. The company’s media portfolio includes businesses such as streaming platform Youku and mobile browser UC Web. A new director who shares the name of a CAC official was appointed that same day, records showed, confirming a Financial Times report.
The fund vehicle that bought into Alibaba is backed by the CAC along with prominent state firms such as CITIC, China Post and China Mobile, the database showed. Discussions are also underway about a government entity taking a similar stake in a Tencent subsidiary in mainland China, a person familiar with the matter said. The Financial Times reported the consideration earlier.
Signs are growing that Xi Jinping’s administration, keen to revive the world’s No. 2 economy, is reversing course on campaigns against gaming addiction and preparing to unfetter firms such as Alibaba that drew government scrutiny.
The country’s central bank is exploring ways to help the technology industry. The People’s Bank of China will study financial support measures for the healthy development of tech companies, Ma Jianyang, an official with the PBOC, told a news briefing in Beijing on Friday, without elaborating.