Chinese President Xi Jinping called on the country’s regulators this week to step up their crackdown on tech companies and extend scrutiny to all areas of financial activity. Xi stressed the need to regulate “platform” companies to maintain social stability during a meeting of China’s leaders on Monday, according to the state-owned Xinhua News Agency.
The phrase “platform company” in China typically refers to businesses that offer online services for customers – technology companies operating anything from social media businesses to e-commerce and could include the likes of Tencent and Alibaba. The Chinese president added that it was necessary to strengthen regulation of the internet sector, according to a summary of his remarks published by Xinhua.
The state media outlet reported that “all financial activities must be included in financial regulations,” according to Xi Jinping, Chinese President. The published comments mark Xi’s first words on the topic since December when he described antitrust supervision of the digital economy as one of China’s most important priorities for 2021.
While Xi didn’t single out any company by name, his decision to double down on regulatory efforts could spell more trouble for big tech firms like Alibaba and its financial affiliate Ant Group, which have already been grappling with increased scrutiny.
Ant, which owns the popular digital payments app Alipay and has huge interests in online investing, insurance, and consumer lending, was forced to halt its $34.5 billion initial public offering in Hong Kong and Shanghai last November and has since been ordered to overhaul its business. Alibaba was also slapped with a fine in December for not reporting previous deals properly to regulators.
Beijing has long been concerned that the influence tech firms have over the financial sector makes that industry vulnerable — Ant, for example, now commands more than half of the mobile payments market in China — and officials have been looking for ways to rein them in. There are now signs that regulators’ crosshairs could focus on other technology firms.
