The technology giants in China are facing a lot of restrictions in the name of transformation in the current government. The Communist Party of China is currently imposing heavy restrictions on businesses and fines to regulate wealth management. The CCP is imposing conditions and limitations under their authoritarian rule. These regulations are a part of the “Red New Deal” agenda.
The agenda justifies the need for increasing the restrictions. The government is heavily discussing the idea throughout the campaign. The red in the “Red New Deal” represents old-fashioned communist logic. Per this logic, the businesses that come in the government’s way will suffer. The government has received much support from the population for their efforts to do away with inequality and provide equal opportunity to everyone involved.
In simpler terms, the crackdown on technology giants represents the conflict between the CCP government and the technology sector of the economy. On the other hand, the government has put a variety of companies under scrutiny. Thus, it is becoming difficult to pinpoint a specific government objective. However, according to the report of the European Times, the principal motivation of the agenda are:
- anti-trust crackdown,
- upgrade to data security,
- a restraint on capitalist “excess.”
Aliba is the first victim of the Chinese government’s anti-trust policy. They received a record-breaking punishment of 2.8 billion dollars. The penalty signalled the Chinese central government’s stance on the crackdown. The reports also state that since the government has Ant Group’s IPO in Shanghai and Hong Kong, the fin-tech subsidiary of Alibaba has lost two-thirds of its market value.
Other prominent companies affected due to the anti-trust policy are Tencent and Meitun. The government fined these companies heavily fined under the crackdown. Meanwhile, other companies like Full Truck Alliance (freight logistics app), and ByteDance (social media) Kanzhun (recruitment) also faced issues and restrictions from the government.