CHINA TIGHTENS POLITICAL CONTROL OF INTERNET GIANTS

The crackdown reflects Xi Jinping’s emphasis on reviving the party’s “original mission” of leading economic and social development.

The ruling Communist Party is tightening political control over China’s internet giants and tapping their wealth to pay for its ambitions to reduce reliance on U.S. and European technology.

Anti-monopoly and data security crackdowns starting in late 2020 have shaken the industry, which flourished for two decades with little regulation. Investor jitters have knocked more than $1.3 trillion off the total market value of e-commerce platform Alibaba, games and social media operator Tencent and other tech giants.

The party says anti-monopoly enforcement will be a priority through 2025. It says competition will help create jobs and raise living standards. President Xi Jinping’s government seems likely to stay the course even if economic growth suffers, say businesspeople, lawyers and economists. “These companies are world leaders in their sectors in innovation, and yet the leadership is willing to squash them all,” said Mark Williams, chief Asia economist for Capital Economics.

The crackdown reflects Xi’s public emphasis on reviving the party’s “original mission” of leading economic and social development, said Steve Tsang, a Chinese politics specialist at the School of Oriental and African Studies in London. He said it could also help Xi politically if, as expected, he pursues a third five-year term as party leader.

Chinese leaders don’t want to reimpose direct control of the economy but want private sector companies to align with ruling party plans, said Lester Ross, head of the Beijing office of law firm WilmerHale.