A senior Chinese official commented to our contacts in Beijing on the latest in a series of government crackdowns, this one on peer-to-peer lending platforms and financial media/bloggers. Separately, China’s President Xi Jinping made comments on China-US competition and the development of China’s high-tech sectors in Zhongnanhai on Friday, excerpts of both which are included below.
Crackdown on P2P and Bloggers
On Beijing’s latest crackdown on peer-to-peer lending and financial bloggers:
“Relevant authorities under the State Council are intensifying a crackdown campaign on problematic online social media accounts that illegally publish financial information and engage in fraud and other illegal activities. Thousands of financial bloggers, especially some popular financial bloggers, will be shut down on suspicion of operating an illegal peer-to-peer (P2P) lending platform within the next few weeks.
“That’s why leading social media platforms such as WeChat, Douyin, and Weibo just announced that they will immediately close financial self-media accounts that are found to be illegally spreading false financial information, blackmailing others, or spreading rumors that lead to strong public anger. I would like to stress that the ongoing regulation could be the new normal.
“Indeed, the scrubbing and removal of illegal financial media accounts, as part of the normalized supervision of the capital market, is crucial to maintaining a stable financial market and defusing financial risks. Also, I must stress that the ongoing regulation of internet platforms is non-discriminatory and by no means targeting private and foreign enterprises only.”
Xi Jinping on US-China and High-Tech Markets
Separately, President Xi Jinping discussed the US-China tech rivalry, negative list, and opening of China’s markets at a meeting in Zhongnanhai on Friday. Excerpts are included below:
“The most powerful weapon against the US all-round containment of China is to focus our efforts on our own affairs and to strive to develop our economy, high technology, and the military…. Opening up is one of the best weapons against the US to contain China…We must continue to welcome and support the development of foreign enterprises in China including US enterprises as long as do they do not become pawns of Washington against China. Relevant departments should speed up formulating and introducing the 2021 version of the national negative list for foreign investment ASAP.”
(*Note – Sources indicate that the 2021 version of the “negative list” restricting access to certain markets will be jointly released by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) before China’s National Day holiday [Oct.1-7] at the earliest. China cut the items on its negative list to 33 in the 2020 version, from 93 in the 2015 version).
Xi added, “The competition between China and the US is fundamentally about talent and high technology…We must always adhere to the development of the industry-oriented real economy, must not learn from the US or must not be capital-oriented. A capital-oriented economy is fragile, built on bubbles and vulnerable to a single blow…
“We must ensure the stability of the financial system and eliminate any potential systemic financial risks firmly, forcefully and in a timely manner. While ensuring an average annual economic growth of five percent in the next 10 years, we must ensure high-quality and steady economic development, and we must never neglect medium – and long-term development goals for the sake of short-term economic growth.
“We must ensure that Chinese high-tech companies have bright prospects for development. All the existing large domestic high-tech companies represented by Huawei are the precious wealth of our country. Instead of destroying the existing big tech companies, we must take more concrete steps to give them a better and bright future.
“On the basis of preventing high-tech companies from monopolizing and ensuring data security, it is necessary to further support the development of all domestic high-tech enterprises. It is necessary to ensure that all existing large domestic high-tech companies can be listed on China’s own stock exchanges by 2025. It is unacceptable for any large domestic high-tech company to be listed only on the US without listing at home. Anyway, large domestic high-tech companies now listed overseas should return to Hong Kong, Shanghai or Shenzhen voluntarily, and not be coerced.”