Changing China: How Beijing's crackdowns are impacting business from freeamfva's blog

Changing China: How Beijing's crackdowns are impacting business

The slew of announcements of tough new regulations and the stringent enforcement of existing rules have targeted many of the country's biggest companies.To get more China finance news, you can visit shine news official website.

As we explained in the first part of this series on the recent developments in China, these measures are part of President Xi Jinping's centrepiece policy initiative, known as "common prosperity".The phrase is not a new one in China. It has been around since the 1950s, when it was used by the founding leader of the People's Republic of China Mao Zedong.

The sharp escalation of the term's use in the year that the Chinese Communist Party (CCP) also celebrates its 100th anniversary has been seen as a signal that it is now central to government policy.Key to the common prosperity policies are Beijing's attempts to narrow the huge wealth gap between the nation's richest and poorest citizens.

It is an issue that some would argue both endangers the rise of the world's second largest economy and poses an existential threat to the CCP.

These latest measures are seen by some as a way to rein in the billionaire owners of some of China's biggest companies to instead give customers and workers more of a say in how firms operate and distribute their earnings.
The ramping up of rhetoric from Beijing in recent months has seen action being taken against a dizzying array of Chinese business interests.

Everything from insurance agents, private tutoring firms, real estate developers and even companies planning to sell shares in the US have come under intense scrutiny.

The technology industry, in particular, has seen a deluge of action against it, including crackdowns on ecommerce firms, online finance services, social media platforms, gaming companies, cloud computing providers, ride-hailing apps and cryptocurrency miners and exchanges.These moves are, of course, having a major impact on both China's economy and society, and effects are also being felt around the world.

The country has long been seen as the factory of the world, as well as a major engine of global economic growth.

Now, the uncertainty around the regulation of businesses in China is making it difficult for companies from overseas to make decisions about potential investments.

Although another way of looking at it is that while there will be some short-term upheaval as the new rules are implemented, the reworked regulatory framework will remove uncertainty in the long-term. Presumably, that's the way the Chinese government views it, at least.Even before it became fully apparent that Mr Xi was looking to reshape China's economy with his common prosperity policies, Beijing unleashed a shock and awe display of its firepower.

Less than a year ago, Jack Ma, the multi-billionaire founder of Alibaba who was known for his flamboyant appearances at dazzling corporate events, was just about to oversee the world's biggest ever stock market debut.

The initial public offering of Ant Group, Alibaba's financial affiliate and owner of China's largest digital payment platform Alipay, was set to rake in $34.4bn (£25.4bn).It would have made Mr Ma Asia's richest person, but then he made a controversial speech criticising China's financial system.Within days of the address the share sale was called off and the once-high-profile Mr Ma was not seen again in public until January the following year.

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