The Ministry of Industry and Information Technology (MIIT)
will take “targeted measures” to foster a fair and orderly market environment,
Minister Xiao Yaqing told state-run media outlet Economic Daily in an interview
published on Sunday. Xiao’s comments come three months into a targeted campaign
to purge what it considers problems in the internet sector.
It has become another element of Beijing’s intensifying
scrutiny of numerous parts of the digital sector over the last year, hitting
everything from social media to financial services. The MIIT is one of China’s
most important tech regulators.
In its current campaign, the MIIT has pledged to address
issues that include poor data security practices, forcing users to accept
personalised services, and blocking or restricting access to competing
services, a common practice among China’s internet giants that keeps users
locked into specific app ecosystems.
Since the campaign started, multiple Big Tech companies have
been opening up their platforms to comply with new regulatory requirements. The
results could eventually be wide-ranging, affecting how these companies compete
with each other. Last month, Tencent Holdings’ WeChat, China’s largest social
media platform, started allowing users to open links shared from rival platforms
in one-to-one chats.
Alibaba Group Holding, the owner of the South China Morning
Post, also started allowing consumers to use WeChat Pay on a number of its
platforms, including food delivery service Ele.me, video-streaming platform
Youku, online ticketing platform Damai and cross-border e-commerce platform
Kaola. Alibaba platforms primarily rely on Alipay, WeChat Pay’s main
competitor, which is operated by the company’s fintech affiliate Ant Group.
In the months since Beijing started cracking down on the tech
sector, US$1 trillion in value has been wiped from related stocks listed in
Hong Kong and the US. Still, the crackdown shows no signs of abating.
The MIIT’s Xiao said his agency will continue to hold
internet companies accountable, strengthen supervision and work with other
government bodies to manage the industry.
In his interview with Economic Daily, Xiao also pledged
support for small and medium-sized enterprises (SMEs) by curbing
anticompetitive behaviour, cutting fees and boosting loans, echoing commitments
previously made by Beijing’s top leadership.
In July, Chinese Vice-Premier Liu He said at an SME forum in
Changsha, the capital of central Hunan province, that the government would
create a sound business environment to nurture growth among smaller firms, and
he urged business owners to be active in the nation’s economic development.
Liu’s comments followed previous pledges of support for the sector from
President Xi Jinping. Premier Li Keqiang similarly pledged support for SMEs two
weeks ago at a State Council symposium, stressing the importance of reducing
monopolistic practices among big firms to allow smaller ones to flourish.
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