Expert Sounds the Alarm as China Moves Against Tech Companies

Expert Sounds the Alarm as China Moves Against Tech Companies

( – Communist China started engaging with the rest of the world in the early 1970s after remaining relatively isolated for decades. Republican President Richard Nixon became the first US president to visit the People’s Republic of China (PRC) on February 21, 1972, and China began to open up to the rest of the world slowly from there.

China’s GDP reached more than $89 billion, in today’s money, by 1980. By the end of 2020, that figure had exploded to $14.7 trillion, representing 13.04% of the world’s economy.

Currently, reports suggest that China’s economic plan consists of several major goals.

  1. First, it wants to reduce the United States’ influence in Asia. Ideally, it would like to push the US completely out of the region, but experts don’t expect that to happen.
  2. Second, China hopes to replace the US as an economic power in Europe and elsewhere whenever possible.
  3. Lastly, it aspires to become the world’s dominant economic and political power by 2049, the 100th anniversary of the creation of the PRC.

At the same time, China is increasingly putting pressure on internal businesses to maintain its authoritarian approach to governance. That reality is causing alarm among some Western experts.

China’s Move Against Tech Companies

In late July, China’s Industry and Information Technology Ministry announced the creation of a six-month program to regulate Chinese-based internet companies. That campaign marks the latest escalation in a heated battle between China’s Communist Party heads and the nation’s largest technology companies.

Chinese regulators have already hit e-commerce giant Alibaba with a $2.8 billion fine for its alleged anti-competitive practices. Officials also forced major restructuring on Ant Group, one of Alibaba’s subsidiaries. Additionally, Chinese officials have targeted other tech companies like Tencent and Baidu for alleged violations of anti-monopoly laws.

Chinese officials have also targeted edtech companies like Yuanfudao, a popular math problem-solving application parents use to check their children’s homework assignments.

Hudson Institute Expert Sounds the Alarm

Founded in 1961, the Hudson Institute is a Washington, DC-based think tank that works to manage strategic endeavors in the fields of economics, international relations, technology, and law.

Riley Walters, the deputy director of the Hudson Institute’s Japan Chair, recently spoke out about China’s aggressive approach to regulating and controlling its tech companies.

According to Walters, China’s efforts to crack down on its technology companies should serve as a warning to United States-based investors. As he explained, China doesn’t want its tech companies to amass enough power to “rival that of their own.” China’s crackdown is designed to keep the country’s tech companies in check as they start listing on overseas stock exchanges.

With this in mind, Walters warned that investors need to understand the Chinese government will remain its tech companies’ “sole regulator,” not global standards and regulatory groups.

As Chinese companies continue to thrive on global markets, investors will increasingly see the appeal of their stocks. However, as the old saying goes, “Let the buyer beware.”

Copyright 2021,