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Chinese state media signal Beijing’s attempt to ease panic about its tech crackdown in unusual front-page editorial

  • People’s Daily editorial says regulation of private education, data security and platform economy is ‘not targeted at specific industries or businesses’
  • Communist Party mouthpiece stresses Beijing’s support of the private sector after stock market rout

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A motorist travels past an Alibaba office building in Shanghai, China, on December 24, 2020. Photo: Bloomberg
Xinmei Shen

People’s Daily, the mouthpiece of the ruling Chinese Communist Party, published a front-page editorial on Wednesday, saying that the recent crackdown on private tutoring, data security and internet platforms is not intended to hurt any specific industry or business, striking a conciliatory tone after a regulatory storm that has stirred fear among investors and wiped out trillions of yuan in tech valuations.

Beijing’s disciplining of the tech sector is aimed at establishing a “new development structure” and pushing for “high-quality” growth, according to the editorial, echoing recent comments by Chinese President Xi Jinping and his top economic aide, Vice-Premier Liu He.

The article also said that the role and status of the non-state economy, along with China’s policies to “resolutely encourage, support and guide” the private sector’s development, remain unchanged. In atypical fashion for the newspaper, those lines appeared in bold typeface and ended in exclamation marks.

This comes as China’s top leadership is stepping up efforts to reassure private businesses of its unwavering support following the government’s initiatives to prevent the “disorderly expansion of capital” and to “pursue common prosperity”. Since the clampdown began, top Chinese tech stocks have lost more than US$1 trillion in market value.
Beijing’s attempt to limit the growing influence of internet companies started last November with the last-minute suspension of financial-technology company Ant Group’s mega initial public offering, followed by antitrust probes into e-commerce giant Alibaba Group Holding and on-demand service provider Meituan, a cybersecurity investigation into ride-hailing platform Didi Chuxing, and an order for Tencent Holdings’ music streaming arm to relinquish exclusive licensing deals.

Alibaba is the owner of the South China Morning Post.

The Chinese government’s increased control of the country’s exuberant tech sector also led to a ban on online lists ranking celebrities by popularity, a crackdown on fan clubs, tightened censorship of financial information, as well as the world’s first draft regulation curbing the use of recommendation algorithms.

Amid rising investor concerns about the crackdown, however, Beijing has been trying to bolster confidence in recent days. This week, Vice-Premier Liu said that “vigorous” support must be offered to private firms so that they can play a more significant role in expanding China’s economy, creating jobs and deepening technological innovation.

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