China’s Regional Governments Strongly Signal that Crackdown on Internet Giants Is over

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Regional governments around China have issued a slew of signals to indicate that the country’s long-running crackdown on the country’s Internet giants is fast coming to an end.

Provinces including Jiangsu, Shandong, Shaanxi, Henan, Zhejiang and Hunan have all recently released policies flagging their support for the development of Internet platform economies, with state-owned media reporting that the development has been coordinated by officials at the central government level.

A leading example is Shandong province, which issued the “Implementation Opinions on Accelerating the Push for Internet Platform Economies to Engage in Standardised, Healthy and Sustained Development” (关于加快推动平台经济规范健康持续发展的实施意见) towards the end of October.

The Opinions call for the creation of an “Internet platform economic system which is unique to Shandong,” as well as the creation of at least five Industrial Internet platforms with national reach by 2025.

Signs have also recently emerged that Chinese officials have softened their attitude towards e-commerce and fintech tycoon Jack Ma, who has maintained a low profile ever since the shelving of the proposed Ant Group IPO in November 2020.

On 10 January, the Hangzhou municipal government and Ma’s e-commerce giant Alibaba entered an agreement for “comprehensive deepening of strategic cooperation.”

Liu Jie (刘捷), the party secretary for Hangzhou and a member of the standing committee for Zhejiang province, said at the signing ceremony that “Alibaba has made a major and irreplaceable contribution to the economic and social development of Hangzhou.”

“The municipal committee and government firmly and unwaveringly support the healthy and high-quality development of Alibaba,” he said. “[We] fully support Alibaba as leaders who strive for innovative development, supporters of integrated development and exemplars of standardised development.”

According to a report from China Securities Journal, the Hangzhou municipal government is already in the process of formulating detailed measures on support for the local Internet economy.

Towards the end of last year, the Zhejiang province government began to make positive overtures towards Alibaba. On 18 December, senior province-level officials visited Alibaba’s headquarters in Hangzhou, where they called for Alibaba to “play a prominent role in driving development, international competitiveness and enriching society.”

Zhejiang province is a leading hub for China’s Internet sector. The province is host to over 300 online trading platforms and more than 9 million online retailers, which reportedly accounts for over half of China’s national total.

In 2021, the total e-commerce platform sales volume for Zhejiang province hit 9 trillion yuan, cementing it position the leading region for e-commerce in China.

China’s central government finance regulators have also explicitly sent signals that their crackdown on Chinese tech giants is coming to an end.

“The specialist rectification of the financial activities of 14 online platform enterprises has already basically been completed,” said Guo Shuqing, party secretary of the Chinese central bank and chair of the China Banking and Insurance Regulatory Commission (CBIRC), in a recent interview with state-owned media. 

“We are currently in the process of making haste to resolve a small number of residual issues.”