August 15, 2021

THEY’RE A NICE SNACK BEFORE TAIWAN: Xi Jinping Goes to War With Chinese Businesses.

Chinese regulators are cracking down on domestic companies, including technology, after-school learning, and real estate businesses. The crackdown is part of the Chinese Communist Party’s continued push to concentrate power and is consonant with President Xi Jinping’s efforts to deter domestic political opponents and business elites from challenging his authority. 

Perhaps nothing highlights the conflict between Xi and his opponents better than China’s decision to scrap Jack Ma’s Ant Group IPO and fine his company, Alibaba, $2.8 billion this past fall after the business mogul criticized Chinese regulators for suppressing financial innovation and economic progress. An investigation by Beijing revealed that some of Xi’s potential political opponents had invested heavily in Ant Group, which further incentivized the Chinese president to clamp down on the company. 

According to a July 29 roundup by Goldman Sachs, China has administered over 50 actions against domestic companies spanning cybersecurity, antitrust, financial regulations, and inequality since November. 

The increased regulatory scrutiny comes amid ongoing geopolitical tensions between the United States and China, who are engaged in what some have described as a new tech cold war. These developments are occurring in tandem: as leaders in Beijing seek to establish China as the dominant superpower on the world stage, the CCP is consolidating power at home. 

Flashback to November of 2019: How to Conduct Business with Chinese Companies That See a Dark Future.

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