(Bloomberg) -- China’s top leader warned that Beijing will go after so-called “platform” companies that have amassed data and market power, a sign that the months-long crackdown on the country’s internet sector is only just beginning.
President Xi Jinping on Monday chaired a meeting of the communist party’s top financial advisory and coordination committee, ordering regulators to step up oversight of internet companies, crack down on monopolies, promote fair competition and prevent the disorderly expansion of capital, according to state broadcaster CCTV. Internet companies need to enhance data security and financial activities need to come under regulatory supervision, CCTV also reported.
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WNU Editor: Like the US, China's tech companies are incredibly wealthy and influential. And like most authoritarian countries, these institutions are perceived by the Chinese Communist leadership as a potential threat. The problem is that China needs these companies to grow and innovate if the country wants to be the dominant economic power in the world.
My prediction.
When given a choice between a threat to the power and economic benefits to its people, authoritarian governments priority will be to protect themselves. The decision to crack down on Hong Kong was made because Beijing perceived the city as a threat to its rule even though the economic costs were going to be severe. The same rule applies here. Beijing will crack down on these tech companies because they are perceived as a threat to their rule. Even though they are going to be heavy economic costs if they do so.
