China’s booming economy has been greatly aided by the success of domestic tech giants. Recently, however, the Chinese government under the leadership of President Xi Jinping even seems to be beating up such companies thus making some people question.
The technology sector accounts for nearly a third of China’s economy. But since the investigation and fines against the tech companies, their total share price has been reduced to around USD 1.2 trillion in just 6 months.
The saddest of course is Jack Ma. They don’t just show up anymore, their companies Ant Group and Alibaba are limited in the scope of their movements. Then recently, the online taxi giant Didi app was released from the online store. Finally, Tencent shares fell sharply after Chinese state media Xinhua labeled online gaming as an electronic medicine.
The reasons are several, such as over-monopolizing, data misuse, the widening gap between the rich and the poor, and others. Still, some argue that the attack was because tech leaders were too popular, and President Xi Jinping had just lost.
“Xi Jinping dominated the headlines about China’s success, name and face but has been replaced in recent years by tech moguls, especially Jack Ma,” the Daily Mail said.
Another theory is that Beijing is trying to minimize investment from the west. Recently, Didi, who had just undergone an IPO in New York, even had her application banned. Foreign investment can be seen as dangerous for national security.
The next theory is that Xi Jinping is more interested in developing sectors that might be useful to China’s strengths, such as robotics and semiconductors to make chips. Chips are a key component of computers, vehicles, satellites to military technology. China, as is well known, is actively helping its military become more sophisticated.
"While the value of Alibaba and Tencent is declining, the country's two semiconductor manufacturers are up 20 percent. China wants to give money to create a domestic semiconductor industry to end dependence on imports," the Daily Mail said.
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