HONG KONG – Hopes are rising that China’s embattled tech giants will finally get a reprieve from the severe legal and regulatory crackdown that has wiped out over USD1.5 trillion of the value of their shares. Amid mounting challenges to economic growth, some Chinese government officials have signaled a possible shift to a new strategy: the acquisition of a 1 percent equity stake – or a so-called ‘golden share’ – in major tech firms. Still, the question remains: will this approach really brighten the outlook for China’s tech industry?
A new approach is certainly needed. The authorities’ efforts to discipline Chinese tech firms over the last 18 months has been both clumsy and extremely costly, featuring a raft of opaque and unpredictable regulations. The abrupt suspension of Ant Group’s initial public offering (IPO) in late 2020, the record antitrust fines imposed on Alibaba and Meituan, and the surprise cybersecurity investigation into Didi Chuxing all spooked investors and sent share pricesThe content herein is subject to copyright by Project Syndicate. All rights reserved. The content of the services is owned or licensed to The Yuan. The copying or storing of any content for anything other than personal use is expressly prohibited without prior written permission from The Yuan, or the copyright holder identified in the copyright notice contained in the content.