Will tech giants still be able to invest freely in China? The question has arisen since January 19. That day Reuters indicated that restrictive rules on investment by large Chinese digital companies were under discussion. The Cyberspace Administration of China (CAC) denied.
Disturbing elements in the face of the CAC version
The CAC, one of the most powerful Internet regulatory authorities in China, has been very clear that the evidence indicating a strict framework for investments by large technology companies is false.
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Yet, according to Reuters, several companies have been contacted in view of a new regulation in China. The document sent would have been shared on Chinese social networks.
Disturbingly, the same day ByteDance announces the dismantling of its declared strategic investments team. TikTok’s parent company simply explained to the wall street journal to want ” strengthen coordination between strategic research and business “. According to a source from the American newspaper, the CAC project is behind this decision.
The latter would still be under discussion and therefore likely to be modified. This could explain the CAC’s rebuttal. The contours of this possible settlement seem to be in line with the antitrust policy undertaken by China during the year 2021, marked by the record fine of 2.3 billion euros imposed in April on Alibaba.
A new offensive by China against its Tech giants?
First of all, it would target the biggest digital companies in China. It would apply to companies claiming a minimum of 100 million users or an annual turnover of 10 billion yuan, around 1.39 billion euros. Those on a gray list of the Chinese National Development and Reform Commission would also be affected.
In detail, the text requires companies falling within the criteria to be approved by the authorities for any new investment. The interest of such regulation is transparent: to curb the expansion of the Tech giants in China. Like their American counterparts, the acquisition of promising start-ups is a widespread practice to expand.
Such a measure would be able to correspond to China’s objectives, to reduce the power of the digital giants by weakening their monopolistic position. If, contrary to what the CAC asserts, this draft regulation is indeed under discussion, it will eventually reappear in broad daylight.