s the Chinese Communist Party (CCP) cracks down on private Chinese technology companies, American regulators should take note but avoid a similarly punitive stance toward innovative technology companies in the United States. Instead, they should adopt a well-balanced regulatory approach that prioritizes technological innovation and U.S. global economic competitiveness.
Despite China’s authoritarian political system, Chinese regulators have long pursued a fairly laissez-faire approach toward technology companies. This environment created the conditions in which innovative Chinese companies have thrived. Many of those companies—like the online marketplace Alibaba and the ride-sharing app Didi—now compete with U.S. companies in international markets. Today, seven out of the nineteen leading internet companies by market capitalization are Chinese-owned. Apart from the United States, no other nation features on this list.
However, the Chinese government’s recent crackdown on companies such as Didi signals a dramatic shift away from its traditionally laissez-faire approach. Faced with the growing power of technology companies and popular discontent over rising inequality, the CCP launched a new crackdown on the Chinese tech sector. After Jack Ma, Alibaba’s founder and the chairman of the Ant Group, criticized China’s financial regulatory system, the Chinese Securities Commission blocked Ant’s IPO and slapped a record $2.8 billion fine for alleged antitrust violations. Jack Ma has since then disappeared from public life.
Read the full article on National Interest.