China issues five-year guidelines to strengthen economic regulation

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China politics and policy updates

China has issued a five-year outline to strengthen regulatory control over strategically important industries including technology and healthcare. This is what Beijing has done to safeguard the supremacy of the Chinese Communist Party in the world’s second largest economy. The latest effort.

The Central Committee of the Communist Party of China and the State Council (or cabinet) jointly issued a high-level policy document on Wednesday night that will expand government legislation and build a modern regulatory environment to “meet the people’s growing needs for a better life.”

The release of the plan followed a series of regulatory measures Shocked investor Business and Knocked tens of billions Lower than the valuation of some of the country’s largest technology groups.

Beijing seems to use the release of blueprints to provide directions for breadth and duration. Regulatory reform, But analysts said that the crackdown will be intensified.

“Chinese regulators will continue to review companies in the Internet and technology-related industries on a range of issues, such as overseas listings, data security, consumer privacy, anti-competitive practices, and merger violations,” said Bruce Pang, research director. In the investment bank Huaxing Capital.

This wide-ranging document emphasizes the “urgent need” for additional legislation to regulate technology educate Departments and resolve anti-monopoly issues that are vital to improving people’s lives.

The blueprint added that it is necessary to study and build a legal framework for digital economy, Internet finance, artificial intelligence, big data and cloud computing in a timely manner to ensure the “healthy development of new business models.”

But Pang said that China’s technology industry will continue to face a series of pressures Socio-economic challenges Problems that Beijing believes must be resolved.

“We expect market sentiment to be disrupted in the short term, and valuations of offshore listed Chinese companies in related industries will be under pressure because of the risk of over-regulation,” he said.

“Decision makers hope to effectively and efficiently solve and solve social problems to ensure social fairness, justice, equality and national security, and to prevent risks.”

In recent weeks, various Chinese regulatory agencies have announced a series of rules that attempt to restrict many industries and companies in the name of protecting national security and the economy. social stability.

The Ministry of Industry and Information Technology released the final version of the Smart Car Guidelines on Thursday. The rule stipulates that companies seeking to export user or vehicle data must first undergo data security review by regulatory agencies. Before upgrading the vehicle’s autonomous driving software, approval is also required.

China Banking and Insurance Regulatory Commission and China Banking and Insurance Regulatory Commission also announced a reform plan for the online insurance industry.

According to a notice seen by the Financial Times, companies and intermediaries in the industry have been required to correct a series of issues including customer data security practices, marketing and expenses. The regulator said this was a major political task and said it would strengthen inspections.

After the announcement, the Chinese stock market generally fell on Thursday, and the Hong Kong Hang Seng Technology Index fell by about 1%.

According to Thomas Gatley, an analyst at the research institute Longzhou Economics in Beijing Sudden regulatory intervention It may be eased, but Beijing’s election campaign “will definitely not be without problems.”

Gartley stated that the reforms will be divided into two main categories: Control information And “common prosperity norms”, or “care for the middle class as consumers and workers.”

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