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Xi Jinping renews call for crackdown on Chinese tech companies

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Xi stressed the need to regulate “platform” companies to maintain social stability during a meeting of Chinese leaders on Monday, according to state data Xinhua News Agency. The phrase “platform company” in China usually refers to companies that offer online services to customers.

The Chinese president added that it was necessary to strengthen regulation of the Internet sector, according to a summary of his statements released by Xinhua. The state media reported that “all financial activities must be included in the financial regulations,” according to Xi.

The comments posted mark those of Xi first words on the subject since December, when he described antitrust surveillance of the digital economy as one of China’s top priorities for 2021.
Although Xi did not name any companies by name, his decision to double regulatory efforts could mean more problems for large technology companies such as Alibaba (BABA) and its financial subsidiary Ant Group, which have already been faced with greater control.
Ant, owner of the popular digital payment application Alipay and who has huge interests in online investments, insurance and consumer loans, was forced to file a large IPO last November and since then he has been ordered to review his business.

Beijing has long been concerned that the influence of technology companies on the financial sector makes this industry vulnerable (Ant, for example, now occupies more than half of the mobile payments market in China) and officials have been looking for ways to control them.

Regulators may soon require Ant to behave more like a traditional Chinese bank than a technology company, suggesting strict restrictions on its business. The company is also facing a recent corporate shake-up: CEO Simon Hu resigned late last week for personal reasons.
The next big blow to Alibaba, founded by Jack Ma, may not be far off. His actions have been under pressure ever since reported the Wall Street Journal last Thursday the company was facing a record fine for alleged monopolistic behavior. Alibaba declined to comment to CNN Business.
Shares of Tencent have also fallen recently rumors that could be the next target per regulators.

Regulators have already questioned Tencent and Pinduoduo executives, punished Bytedance and Baidu with fines for alleged monopolistic behavior in corporate acquisitions, and introduced new rules that could govern the operations of many technology companies.

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