The Strategist

China ponders loosening control over tech sector

05/02/2022 - 03:45

The Chinese authorities will discuss loosening control over the technology sector with Tencent, Meituan and other IT-giants, newspapers reported.

Jon Russell
Jon Russell
China plans to loosen controls over the country's technology sector amid a slowdown in economic growth. This week the Chinese government will hold a meeting with representatives of the largest IT-companies to discuss the regulation of the industry, report The Wall Street Journal and The South China Morning Post, citing sources.

The government could, among other things, suspend restrictions on the amount of time young Chinese residents spend on mobile apps, one of the WSJ's interlocutors pointed out. According to another source, Beijing is considering taking a 1 percent stake in the country's largest technology companies to be able to directly influence corporate decisions.

According to WSJ, in particular, the most expensive Chinese IT-company Tencent and the country's largest food delivery service Meituan will take part in the negotiations. Earlier, the Chinese authorities have already spread such control measures on the internet companies ByteDance (the owner of TikTok) and Weibo (manages the Chinese analogue of Twitter with the same name), the newspaper writes.

The key message for tech companies is that the government wants them to grow and play their part in Beijing's efforts to strengthen an economy hit by coronavirus restrictions, a source told The South China Morning Post. Tight regulatory scrutiny over the past year and a half has been one of the biggest investment risks for Chinese IT firms, costing them "trillions of dollars in market value", the newspaper noted.