The new provincial Communist Party Secretary of Zhejiang, home province of Alibaba Group Holding, visited the company’s campus, in a show of support for the Chinese technology company. Yi Lianhong, who was appointed to the post this month, urged the company to “strive to be a model student of normative development and a leader of innovative development”, according to the official Zhejiang Daily. Yi is the first senior Chinese government official to visit Alibaba since it was placed under an antitrust investigation two years ago. The visit came two days after China’s central economic working conference (CEWC), chaired by President Xi Jinping, issued a statement saying that the country’s Big Tech platform enterprises, such as Alibaba, would be encouraged to “fully display their capabilities” in growth, job creation and international competition.
At Alibaba, Yi repeated the line and urged the firm to “adhere to development and regulation” and to “unleash innovation dynamics and enhance core competitiveness”. At the same time, Party Secretary Yi said capital investment and expansion has to be regulated. Alibaba, which has been a major business operation in Zhejiang for years, has been the target of regulatory scrutiny over the past two years. In 2021, it was fined a record CNY18.2 billion for monopolistic behavior, while Viya, one of the top live-streaming hosts on its e-commerce platform, was erased from China’s cyberspace after she was accused of tax irregularities.
Alibaba’s shares lost two thirds of their value in Hong Kong and New York after Beijing launched its regulatory scrutiny and the U.S. issued threats to delist Chinese companies from its main bourse. However, the Central Economic Work Conference signaled that the central authorities are looking to internet platforms such as Alibaba to play a role in reviving the slowing Chinese economy. This marks a clear shift from the policy of 2020 and 2021. During the 2020 economic work conference, Beijing pledged to prevent the “disorderly expansion of capital”, which was followed by two years of unprecedented regulatory crackdown on the country’s tech firms, covering business activities from content and data security to mergers and acquisitions (M&As).
China’s efforts to clip the wings of the country’s Big Tech resulted in billions of dollars being erased from the market value of leading tech firms, as well as the postponement of several big IPOs, and more recently an increase in job cuts. The change in mood towards the platform economy comes as Beijing is pivoting its policy mix towards economic development after Covid-19 controls and regulatory campaigns dampened the confidence of investors. Beijing has also reiterated its longstanding policy to support private business, the South China Morning Post reports.
