China’s Communist Party says it wants only the good side of private capital and vowed to step up efforts to regulate and guide it.
China should encourage the "orderly development" of capital, including stronger governance and market supervision, to avoid its "savage growth", the Communist Party's official People's Daily newspaper said in a commentary on Tuesday.
The commentary comes amid a broad push to rein in big corporations, particularly in the vast online "platform" economy, that has seen companies including Alibaba Group and Meituan fined for monopolistic behaviour.
"The purpose is to guide and urge enterprises to obey the Party's leadership, obey and serve overall economic and social development, encourage and support enterprises to play an active role in promoting scientific and technological progress, promote a market economy, facilitate people's lives and play an active role in participating in international competition", it said.
BRICS Competition Law and Policy Centre expert Maria Belyaeva emphasizes that Xi Jinping stated the need to "strengthen antitrust measures and prevent indiscriminate capital expansion" back in late 2020.
"After that, the antitrust campaign against digital platforms began: the investigation against Alibaba, the introduction of the Methodological Guidelines for Platform Economy, fines for uncoordinated M&A transactions in the Internet sector, etc. Since then, this attitude has been repeated in various iterations at all more or less large meetings on economic policy and program measures: to put "traffic lights", to designate "minimum limits" (i.e., the limits of what is acceptable)”.
The proposal to create "traffic lights" for controlling capital was first voiced by the Communist Party leaders, at the December meeting. The phrase has garnered much attention, although it’s unclear what it actually means in practice.
The newspaper also called for "traffic lights" for capital, including improving negative list management systems, strengthening industry and market supervision, and boosting regulation of monopolies and unfair competition.
The People’s Daily article is the second in a five-part series focusing on five key theoretical and practical topics put forward by the Party’s top leadership during the annual Central Economic Work Conference last December.
According to Maria Belyaeva, the Chinese authorities are effectively coping with the set tasks:
"The development of technology and the Internet are strategically important goals for China, and the regulation of companies is aimed not at slowing down such development, but at making it manageable, putting the right vector, using the potential of large corporations for the benefit of national development. Recently, the focus has shifted from accelerated growth to "high-quality development”. The market regulator always emphasizes the "simultaneous importance" of development and regulation— these processes do not contradict each other, but rather complement each other”.
China will pick up the pace in "perfecting" legal rules against unfair competition among companies, an official of the top market watchdog said in late January.