Tech has greatly empowered rent seeking activities in the western world. It’s not implausible that the Chinese government is simply curtailing this activity using the mechanisms that they have traditionally used for other political objectives.
I’m not sure how you arrived at this conclusion. My take away was the Chinese government fears tech companies that might take power away from the Chinese government. This is more about the Chinese government maintaining its own power and full control, and less about the value add or anti trust stance for keeping a competitive market.
https://danwang.co/2020-letter/
> While promoting the status of science and technology with one hand, the Chinese government has with its other hand reined in the activities of consumer internet companies. I’ve never stopped lamenting the marketing trick that California pulled off to situate consumer internet as the highest form of technology, as if Tencent and Facebook are the surest signs that we live a technologically-accelerating civilization. The “tech” giants are highly-capable companies that print cash. But they’re barely engaged in the creation of intellectual property, excelling instead on business-model innovation and the exploitation of network effects. It’s become apparent in the last few months that the Chinese leadership has moved towards the view that hard tech is more valuable than products that take us more deeply into the digital world. Xi declared this year that while digitization is important, “we must recognize the fundamental importance of the real economy… and never deindustrialize.” This expression preceded the passage of securities and antitrust regulations, thus also pummeling finance, which along with tech make up the most glamorous sectors today. The optimistic scenario is that these actions compress the wage and status premia of the internet and finance sectors, such that we’ll see fewer CVs that read: “BS Microelectronics, Peking; software engineer, Airbnb” or “PhD Applied Mathematics, Princeton; VP, Citibank.”
Read the whole letter, it is very informative, unlike most coverage in the Western business press that leans towards the caricatural. Xi may be evil and ruthless, but that does not mean he is stupid, or insincere in his nationalism. It would be a grave mistake to underestimate him and think of him as just another Putin.
Coverage of China in the US business press is abysmal, which is kind of surprising given how important the bilateral relationship is, but then again the US is so big, so central to the world economy and so powerful it could survive for a long time with an insular point of view, a luxury it no longer has. You will get much better coverage in Japan's Nikkei, and in specialized blogs.
but destalizie the financial system would be undesirable by any government, hardly to say it's a CCP problem.
I keep the claim that the explanation is even more simpler: whomever becomes a big man in a country like China eventually goes down, and that's the whole story.
There can only be one "big man" in such system, and he tolerates no competition.
This consistently held true through the whole 40 years of modern China: whomever attains too much of the social, political, economical, cultural, moral, or even genealogical prominence consistently gets taken down. This is why most mainland Chinese have that fear of publicity, and standing out almost bordering on panic disorder. And this is why people attaining any level of prominence there keep leaving the country for the West.
What about their wrong simply being "getting too rich, and successful," and causing somebody a burst of jealousy?
Becoming richer than a partyman in some small village is very much a challenge to the party. What changed now is that the entire China has become that village.
He has also done tremendous institutional damage to the PRC by rolling back Deng's reforms and going back to the Mao model of, ahem, governance. That Xi himself is a relatively competent leader does not guarantee his successors will also be, and you have to consider how Mao killed more people than Hitler and Stalin combined through sheer incompetence to understand how dire the consequences could be.
It's interesting given his family history: his father was purged by Mao, rehabilitated by Deng, but eventually also fired by Deng. Xi Jinping had a very hard time after his father's fall from favor, and some have compared his adoption of Maoism as a form of Stockholm Syndrome.
Xi also overreached by challenging the US too soon rather than bide his time and wait another couple of decades by which point China could have weaned itself from dependence on the US for tech like semiconductor fabrication and been much less vulnerable.
Xi's model of governance is essentially the traditional Chinese model of an Emperor aided by a mandarinal bureaucracy, just with engineering substituting for study of the Confucian classics as training mode for the mandarins. Chinese politicians' advancement is conditional on them meeting GDP growth objectives (now also environmental indicators), essentially it's run just like Google with its OKRs.
Every monarchy in history has had to deal with unreliable minions. Usually they deal with it using a secret police, and another secret police to watch over the first secret police, and so on.
Yes but he wouldn’t be alive by then. It also helped unite his citizens to a common enemy to ensure he had continuing support while he selectively purged powerful party members that wasn’t on his side. I am sure he weighted the consequences and determined China was economically powerful enough for a long fight.
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Retire...
Not based off my opinions but assessements of intelligence dossier from CIA on Xi's background, his reputation prior to elevation as Shanghai party secretary and opinion of eminant China hand Lee Kuan Yew. Enough intelligence from credible sources comports to Xi's character to dispel generic corrupt princeling narrative. I was a Xi skeptic, he's uncharismatic, doesn't seem intelligent, but in retrospect, he appears to be the genuine article.
> done tremendous institutional damage to the PRC
He dug PRC out of the exitentially corrupt hole when Deng's reform ran it's course, i.e. growth + decadence that led to thorough CIA infiltration. Enter anticorruption drive and national security policies that purged all the foreign influence, finally securing restive territories like XJ, Tibet, HK. Obviously succession might be an issue, but he mitigated otherwise existential crisis. Short term that takes precedence. Just like Mao kept the country together at cost of 60M lives is bluntly far from dire at PRC scale. Sure Xi's family might be corrupt, but grafting a little on the side (again millions/billions is peanuts relative to CCP scale) does not mean his overall governance of the country does not focus on right priorities and outcomes, i.e. Xi's fixation to expedite the creation of durable insitutions that is designed to outlast any one individuals reign is a worthwhile gamble.
> interesting given his family history
This is generic pathologizing by lazy China watchers who has gotten more wrong than right. Again, evaluate Xi based creditable sources that actually interacted with him. There's too much China Collapse, CCP corrupt memes substianted by nothing but feelings and reguritated ad nauseum.
> Xi also overreached by challenging the US too soon
No, Xi responded to US pivot to Asia under Hu. Containment already proceeded Xi, and wild card Trump is not something that even Xi could anticipate / manage, which by all accounts he did well until covid19, another wildcard. 10Trillion GDP China in 2017 already could not hide + bide anymore, US reeeing at China threat in the last few years was in response to PRC modernizing military with less than NATO's 2% in defense spending. The fact that Xi actually committed to modernizing PRC military compared to BoXiLai who was buddy with corrupt PLA brass is absolutely clutch to mitigating ongoing US containment efforts. Side effect of Deng's development model / hide & bide = being helpless @ US bombing PRC embassy in Kosovo, US carriers groups sailing through strait during cross strait crsis', pre-NSL HK becoming spy capital of Asia etc etc. Semiconductor bans was happening under Obama as well, pre Xi. Again your timeline is backwards, Xi anticipated and mitigated ramp up in US containment efforts. Cannot stress this point enough. That alone, makes him the BEST possible successor to Hu. 5-10 years late in building up coercive military power = huge opportunity for US to shift regional balance. Forcing potential US supporters to hedge by no longer biding was not overreach, it was presient. Xi is doing something spectactularly right when Trump, who filled his cabinent with all the worst China-hawks, like Pompeo, still didn't sail US Carriers through TW strait during the worse break in relations in generations.
>Xi's model of governance
That's a very reductionist view of governing the most populous country with lots of domestic and international components including competition with US. With respect to the topic, how does it address PRC's tech regulation. To be similary pithy, Xi is closing the comprehensive power gap with US during an extremely vital time where both countries are at their most vunerable and with future hegemony on the line. IMO he's doing more right than wrong.
Not only is the premise that 'DiDi' etc. do not create 'real value' simply false, the notion this is Xi's primary concern is isn't true either.
Xi's #1 concern is power and control. It's ridiculous that they're talking about 'protecting people's rights and warding off monopoly' when they're literally doing the opposite in Orwellian terms.
There's no 'hollowing' of the economy due to any of giant's usage of data. While competition is a concern, it would be really bad industrial policy to consider 'chips' somehow more important than the things you can do with them.
Ant is consumer credit where there was none before, and that's a huge, huge pillar of economic growth especially on the domestic consumption side where Xi wants to push the economy.
The notion that Google et. al. are 'middlemen' is beyond wrong.
Xi has also stopped these companies from listing in the US, which isn't good for anyone but the CCP.
This is mostly a game of power, not industrial policy.
Didi committed the sin of going ahead with a US listing against explicit orders from the government, in the context of an economic cold war with the US. China has plenty of capital, it's not as if we're in the 1970s and the US is the only way to go. You can bet that if JP Morgan Chase wanted to shift its headquarters to Hong Kong, the US would also take swift action. What the Chinese are doing with foreign listings is not all that different from what the US does with CFIUS.
Wanting to preserve privacy from private companies is not at all inconsistent with wanting the government to have total surveillance power. There are many domains where government has a monopoly, from issuing currency to the exercise of violence.
You will note Xi is cracking down in other areas that are not a plausible threat to the CCP, like bitcoin miners or the educational tutoring arms race. Sometimes, the stated agenda is the actual agenda.
1) Where a company derives it's revenues, is not necessarily where it creates value.
2) Search is not a side-show, neither is mapping, Chrome, v8, Android, Google Cloud, Go, Flutter etc. - and frankly neither is advertising.
3) Advertising is valuable. Only really those who've never worked in business don't realize this. Companies don't spend gazillions on it for no reason. Lack of efficiencies in marketing are obvious, but so are they in other fields.
... also:
"China has plenty of capital, it's not as if we're in the 1970s and the US is the only way to go."
This little sense as China has it's own central bank, which is politicized, and Xi makes his own capital out of thin air.
China never needed 'US Dollars' for anything. They needed 'US Buyers' and to steal 'US knoow how and tech' - but they never really needed foreign direct investment.
"Xi is cracking down in other areas that are not a plausible threat to the CCP, like bitcoin miners"
No, BTC is one of the biggest threats to the control of the CCP (and other financial institutions) because it puts economic activity completely out of his control - especially trans national control.
'Crypto Currencies' - or any for of economic freedom outside the purview of the CCP - is probably the #1 threat to the CCP - more than military, or social upheaval. BTC is obviously too small right now to be a problem, but it balloon quickly putting everything outside his power, and the rest would follow.
I don't even get it why you bothered to mention Ant, I wouldn't feel sorry for comsumer loan companies in another lifetime. You claim it to have pushed economic growth, that's the same as saying the pre-2008 housing market in the US is a huge pillar of economic growth, and look at where that lead us.
He is, of course, absolutely correct. Lax antitrust enforcement in the US (nonexistent, really) is leading to concentration and stagnation.
As for EdTech, it's an arms race of tutoring to get into a limited places in good universities, with diminishing results leading to a stalemate since everyone gets tutored, and just a parasitic drain on the economy, hence efforts to clip its wings. Nonprofits like Khan Academy that are genuinely interested in improving education would continue to operate. Much the same could be said of political contributions in the US.
I would expect the residential property business bubble to be next, since it's another huge misallocation of resources (although it's already started with Wanda and Vanke).
https://www.aljazeera.com/economy/2021/7/28/in-its-latest-cr...