2020–2021 Xi Jinping Administration reform spree
Though mostly targeted at disrupting the growth of "monopolistic" technology companies, the government also introduced other reforms with implications for large swathes of the economy and life in China.
[5] Economic reforms under Chinese leader Deng Xiaoping in the 1980s relaxed government control of some portions of the economy, allowing for the emergence of private industry.
[16] Chinese leadership has said the reforms aim to increase common prosperity in the hopes of shrinking the country's income and wealth disparities.
[19] Other commentators have speculated that the reforms amount to an attempt by Xi to retrench his power before the 20th National Congress of the CCP and an effort aimed at China increasing its self-reliance,[20] due to heightened tensions with trading partners.
[23] In August 2020, in an effort to better manage the sector, which historically has been heavily leveraged, Chinese regulators introduced drafts of rules dubbed the three red lines to formally limit the borrowing of real estate firms.
[30] The China Securities Regulatory Commission previously imposed new restrictions on money-market funds, a move attributed to the size and growth of Yu'e Bao, an Ant offering.
[37] The Wall Street Journal attributed the suspension to the personal will of Xi, who had become infuriated by Ma's comments, citing "Chinese officials with knowledge of the matter",[33] though these assertions have also been characterized as "rumors".
[38] The suspension was unexpected, surprising bankers working on the transaction,[39] the broader financial industry, and consumers prepared to invest in the offering.
[40][41][42] Ant began working to address regulator concerns in January 2021,[43] though as of September 2021, no public plans for an IPO by the company had been announced.
[44] Soon after the suspension of Ant's IPO, in November 2020, Chinese regulators introduced drafts of new anti-monopoly guidelines directed at large technology firms.
[41][45]: 172 China had, in January 2020, revised its Anti Monopoly Law to include language applicable to internet and technology companies.
[46] In December, Alibaba and a subsidiary of Tencent were both fined for not seeking approval of deals the companies had completed, which was framed as an anti-monopoly action.
[5][45]: 172 These newly instituted rules include banning online retailers from presenting different prices to different consumers based on data collected about them.
[48] A month after the release of the draft anti-monopoly rules, party officials began using the phrase the "disorderly expansion of capital" to describe the target of economic policy and reforms.
[22]: 261 The Chinese government spoke positively of Ant Group's changes, including describing them as improvements in transparency and accountability.
[53] The nation's anti-trust authority, the State Administration for Market Regulation, began hiring new staff the month after Xi made these comments.
[67] American investment firms impacted by the new rules include Sequoia, Tiger Global Management, and Warburg Pincus.
On July 4, 2021, the Cyberspace Administration of China ordered app stores to remove DiDi, after citing violations on the company's collection and usage of personal information.
[45]: 172 SAMR fined Meituan $534 million in October 2021 in response to its practice of demanding that retailers using their app sign exclusivity agreements.
[45]: 173 During the reform spree, the government increasingly took golden share stakes in companies in order to maintain control of the private sector, especially technology firms.
On August 27, 2021, the Supreme People’s Court with the Ministry of Human Resources and Social Security issued a public notice that China's 996 work schedule utilized by big technology companies was illegal.
[82][83] Since the beginning of the reform spree, administrative bodies and courts have taken an increasingly protective view of platform economy workers and have issued a series of measures designed to improve their labor conditions.
[22]: 188 In August 2021, the National Press and Publication Administration announced video game usage by minors would be restricted to 90 minutes during weekdays and 3 hours during weekends.
[22]: 225 Despite the "three red lines", Chinese real estate developer and conglomerate Evergrande released a statement on 31 August 2021, warning it would default on its debts if it failed to raise enough cash to cover them.
[89] The plan calls for the continued introduction of rules and reform governing portions of the economy including the technology sector, finance, and defense.
[45]: 173 That month, Premier Li Qiang met with representatives of major tech companies to convey the "strongest signal" in support of the industry.
