By Wang Zhijian, Chinese Consul General in Christchurch
China’s recent regulatory actions rectifying malpractices of certain internet companies and private training providers have attracted western media’s attention and criticism. Certain western media reports described these actions as a clampdown on capitalists, an attempt to decrease regulatory transparency and a setback to the market economy. This is nothing but misinterpretation.
The regulatory framework of industries in any country is always aimed to increase regulatory compliance of businesses, protect consumer rights, maintain fair competition among all players, and establish a business-friendly market environment. So it is with the above-said actions relevant Chinese authorities have taken.
Certain dominant players in the internet technology and training sectors in China have been making profits at the expense of consumers’ legitimate rights through serious non-compliant activities. These include internet platforms’ refusal to enable online transactions below a certain amount, mobile-phone apps’ illegally collecting consumers’ personal and sensitive data, and over-capitalized private training providers pursuing unreasonably high profit returns. These activities breach China’s existing laws and regulations, infringe consumer privacy, pose threat to information security and market competition, and hence need to be dealt with in accordance with law, thereby encouraging competition and innovation and sustaining healthy economic development.
Most importantly, the said regulatory actions are set to strike a balance between efficiency and fairness and promote common prosperity by curbing monopolistic practices. To achieve common prosperity and reduce wealth inequality is a common challenge being tackled in China as well as across the world. Distributing the cake properly in addition to making the cake bigger is the inevitable approach to opening monopolies to competition and avoiding the middle-income trap.
This approach is in fact extensively used in Europe and America. The U.S. is the first country to introduce the Antitrust Law, and it has increased efforts to counter monopolistic practices of internet technology giants in recent years. The European Union has also promulgated the Digital Services Act and the Digital Markets Act to curb illegal competition of internet platforms. China’s actions are of no difference with what regulators have done in Europe and America.
China has been engaging with the world under the reform and opening-up policy for more than 40 years with remarkable achievements. There is no point to dump its highly effective opening-up policy and high performing market halfway before achieving its second centennial objective. Being its national strategy, China’s reform and opening-up policy remains unchanged. China has no intention to reverse its ongoing opening-up process.
As pointed out by the Economist and relevant Financial Times reports, China’s current effort aims only to meet universal regulatory challenges. Its measures to prevent income inequality, protect information security, reduce education and training costs, boost population growth, and crack down housing speculation will enhance the reform and opening-up and maintain the healthy momentum of economic development.
At the moment, China’s prompt economic recovery from the pandemic is acting as the long-term stabilizer for global cross-border trade and investment. With the dual circulation strategy in place and the enormous opportunities it provides, China continues to welcome foreign businesses to invest and explore the potential of its huge market.
Caption: Shenzhen in South China