The View | How China’s tech crackdown lays foundation for future growth

Recent regulatory actions by the Chinese government towards the tech industry have raised concerns for many people. Starting from the postponement of Ant Group’s IPO to the complete overhaul of regulations governing private tutoring and additional regulations on other market leaders, many are wondering whether these steps constitute a sudden change in the government’s attitude towards private enterprise.

In the past decade or so, Chinese entrepreneurs have been quick to leverage the internet to build innovative business models. As a result, e-commerce, “new retail”, mobility services, food delivery and the like have created many highly valued companies.

Ant Group’s initial public offering was postponed because of concerns over excessive financial leverage, which implied potential major risks to society. Alibaba and Meituan were penalised for insisting merchants choose only one platform. Didi Chuxing listed on the New York Stock Exchange on June 30, but did not fully comply with China’s regulatory requirements on data security and is now being told to do so.

For Meituan, the mandate to pay basic benefits to its delivery people is a workers’ welfare measure. And regulations on private tutoring were tightened amid concerns about the increasingly exorbitant costs of children’s education, which could hamper the new, relaxed childbirth policy.