China’s humbled tech tycoons pledge allegiance to Xi’s vision

A file photo of Zhang at the 2020 World Internet Conference (WIC) in Wuzhen, China. Zhang and Tencent’s Guo on Sunday voiced their backing for Xi’s flagship goal to narrow the country’s wealth gap, at the WIC hosted in the resort town of Wuzhen from Sept 26 to 28. — Reuters

China’s embattled tech tycoons lined-up to pledge their support for President Xi Jinping’s “common prosperity” policy and market-roiling regulatory onslaught on the digital sector, at the country’s annual internet conference.

Alibaba Group Holding Ltd’s chief executive officer Daniel Zhang and Tencent Holdings Ltd’s senior vice-president Guo Kaitian on Sunday voiced their backing for Xi’s flagship goal to narrow the country’s wealth gap, at the World Internet Conference hosted in the resort town of Wuzhen from Sept 26 to 28.

Xiaomi Corp’s co-founder Lei Jun said on the same day that technology companies should help close the digital divide and boost small and medium-sized enterprises, two of Beijing’s long-standing policy pursuits.

The summit comes as China’s tech giants weather immense regulatory upheaval on everything from online gaming to data ownership and overseas financing. Alibaba and Tencent-backed food delivery giant Meituan and ride-hailing app Didi Global Inc. are all under investigation.

The campaign to rein in tech came after Alibaba co-founder Jack Ma chastised regulators for stifling innovation last October, illustrating the importance of not challenging government policy at a public forum.

Eric Jing, chairman and CEO of Ant Group Co, said Sunday the recent slew of new policy guidelines for the Internet were “important and timely, and a reminder for us in the industry not to be distracted by competition, but to return to the original intent of the internet instead”.

He also espoused the benefits of the blockchain, saying the technology “can provide a solid foundation of trust for industry collaboration” and called attendees to “contribute to the country’s inclusive and sustainable development”.

Kendra Schaefer, a partner at Beijing-based consultancy Trivium China, said Beijing wanted all of its big tech companies to “get the message and get on the common prosperity boat”.

“China is not interested in developing a big tech ecosystem that replicates what it sees as the failures of Silicon Valley, but rather one built around common purpose,” she said. “That purpose is service to the growth of China’s digital economy, and service to the general population.”

Xi launched China’s annual Internet summit in 2014 to much fanfare, and in previous years industry stars such as Apple Inc’s Tim Cook and Google’s Sundar Pichai flew in to hobnob with Chinese apparatchiks.

Strict pandemic border controls have limited in-person networking opportunities at recent events, with US industry leaders this year paying heed to China’s economic and social goals via video.

Tesla Inc’s Elon Musk commended China’s new regulations to strengthen data management, saying in a video message that his company localises its China data.

Qualcomm Inc’s Cristiano Amon praised the speed of China’s 5G rollout and urged US and Chinese companies to collaborate more, while Cisco Systems Inc’s Chuck Robbins spoke about aligning with Xi’s vision of a shared cyberspace community for the benefit of all.

A senior official from the Cybersecurity Administration of China, the agency at the forefront of China’s tech crackdown and organiser of the conference, vowed to take further steps to rein in Internet companies in a speech at the summit on Monday.

Vice Minister Sheng Ronghua named self-driving vehicles, online health care and smart delivery as areas of concern. Regulation of smart delivery applications could impact Meituan, for instance, while Baidu has worked on autonomous driving and Alibaba Health Information Technology Ltd and JD Health International Inc do business in the online health sector.

“We are looking to improve the regulations on shared economy and platform economy to safeguard their healthy growth,” Sheng said. “We are also looking to set up frames for the management of areas in autonomous driving, online health care and smart delivery.”

Founded in 2011, the once low-profile watchdog – which operates under the Central Cyberspace Affairs Commission chaired by Xi – shot to prominence this year, setting new rules that mandate CAC approval for any company that wants to go public abroad, if it has more than one million users.

Chinese authorities have also warned in recent months against the disorderly expansion of capital in platform economies and required Ant to undergo a “rectification” programme after the surprise halt of what was set to be the world’s largest IPO.

In recent weeks, Ant agreed to share data from its small loans service with the Chinese central bank’s credit reference center, and is said to be creating a separate app for its loans business and bringing in state-backed investors. – Bloomberg

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