The tide is turning for the Chinese tech giants. Children until now cherished by a regime of which they symbolize both the greatness and the success, Alibaba, Tencent, Meituan and other JD.com are victims of their success. To everyone’s surprise, their spiritual father, the Chinese Communist Party, is currently inflicting a series of calls to order on them, urging them to fall into line.
Logically, the expiatory victim is the most turbulent of the enemy brothers: Jack Ma, president of Alibaba, the Chinese equivalent of Amazon. Less than forty-eight hours before the historic IPO of its financial subsidiary, Ant, the supervisory authorities humiliated him on November 3 by blocking the transaction, depriving the Chinese billionaire of an additional $ 37 billion ( 31 billion euros). A decision made, according to the Wall Street Journal, by President Xi Jinping in person. But beyond the first of the class, the whole gang is targeted.
Experimental launch of a cryptocurrency by the Central Bank of China in early October, opening of a debate on the protection of personal data on October 20, publication of a bill on the regulation of FinTech on November 2, then of another bill on monopolies eight days later … The time for regulation and recovery has clearly come.
Like the United States, China is realizing that after promoting competition, it has seen its Internet giants form oligopolies which end up hampering it. “Thirty-five years ago, American technology companies took risks and disrupted established business models. Today, these are new public services that derive income from their monopolies by controlling markets. (…) China wants to avoid falling into the American trap ”, analyzes economist David Goldman on the Japanese site Asia Times.
“The Chinese Internet giants are less internationalized than the Americans but have a more diversified offer. In finance, health, autonomous cars, they are ahead of the Americans. They are really very powerful. Alibaba and JD.com account for 75% of e-commerce. WeChat, a subsidiary of Internet and mobile services specialist Tencent, provides 60% of all payments in China ”, observes Jean Dominique Seval, director and founder of the consulting firm Soon Consulting, a specialist in the Chinese market. Alibaba alone would represent 20% of all retail trade in China, compared to 5% owned by Amazon in the United States.
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