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Chinese govt's recent steps can backfire

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China | Business Standard Editorial Comment | chinese companies

Business Standard Editorial Comment  |  Mumbai 



China’s policymakers are intensifying the crackdown on the private sector and broadening its scope. The “anti-tech” policy has eroded the valuations of China’s tech giants and the education sector has been declared non-profit. Any business entity teaching school subjects cannot have foreign investors, list abroad, or make profits. This decree instantaneously eroded $600 billion of online education valuations. It is the latest in a sequence of moves against corporations. In November 2020, regulators blocked the $34-billion initial public offering (IPO) of fintech giant ANT. It was told to reform and restructure. ANT’s sister company, e-commerce giant Alibaba, was hit with a $2.8 billion fine for anti-competitive behaviour. Didi, which dominates China’s ride-hailing sector, came under fire just after its $4.4 billion IPO in the US. It is being investigated for data-collection practices and monopolistic behaviour. The Didi ride-hailing app was removed from super-apps, WeChat, and AliPay.

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First Published: Tue, August 03 2021. 22:41 IST

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