China's Big Tech Crackdown

For the last forty years or so, China has been steadily and systematically reshaping itself into a market economy. Whilst the popular narrative of China is as an authoritarian command and control state that watches everyone and oppresses everything, the reality is that China has been strategically building a technology infrastructure for a 21st-century digital economy.

In this week's Wiser! Newsletter, Rick Huckstep takes a look into what's going on with China's Big Tech Crackdown. And contrasts the difference in approach between Beijing and Washington when it comes to policy decisions aimed at the BigTech monopolies.

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China reins in Big Tech

China’s Big Tech giants have built massive monopolies with flywheel network effects to power China's digital economy. This is best illustrated in the way that the country’s payment system has moved from cash to cashless, with Ali Pay and WeChat Pay dominating.

(Read this article and interview with expert Richard Turrin about China's transition to a cashless society ($))

After a decade of a hands-off approach to China Tech, especially in financial services and e-commerce, China has decided its time to take action. In no small part, by looking at the power and influence of the Big Tech monopolies in the United States and saying "this ain't happening here".

It started late last year when Chinese regulators pulled the plug on Ant Group's massive IPO at the 11th hour.

Ant IPO

Ant Group is part of the Alibaba Group, a Chinese multinational e-commerce, retail, and financial services technology company often called the "Amazon of China". Ant includes Alipay, the largest Fintech company in the world.

Last November, Alibaba was forced to scrap the Ant IPO at the last minute. The floatation was expected to raise $37 billion and value the company at over $300 billion.

This state intervention appears to have been instigated after Alibaba founder Jack Ma, the richest man in China, gave a speech. The Speech.