Currently, China’s is moving towards regulating large technology giants to become a technological “Superpower.” Like the European Union and the U.S., China is now working out on the technology sector in several areas starting from data protection to antitrust. Well, China’s technology companies have grown, are highly unencumbered by regulation, and turned the biggest in the world. Many regulations have come into effect or in the process of implementation.
China’s central bank and regulators released draft rules on so-called microlending that includes provisions such as capital requirements for technology firms who are offering loans in November. Remarkably, China’s State Administration for Market Regulation (SAMR) has published drafted rules in order to stop monopolistic practices by internet platforms. It is the wide-sweeping proposal in China for regulating large tech companies.
In the last month, SAMR said that it had all begun a probe into Alibaba over the monopolistic practices. In October, China has released a draft personal data protection law aiming to regulate how companies process user data. As per Kendra Schaefer, a partner at Trivium China, a research firm based in Beijing conveyed that these regulations are part of China’s bigger effort to become a major global tech power.
Schaefer said to a news channel, “Underneath all of this stuff I think China understands that if it’s going to become a technological superpower … then it has to lay a solid regulatory foundation. It has to lay that foundation in the way that it regulates company operations, but it also has to lay that foundation in terms of data. In fact, data might be the most important regulations that it has got to lay down. All of these things are foundational and it’s really just kind of setting a framework, a springboard from which China can develop and move forward faster.”
Now, Beijing appears to have become a harder stance against the country’s technology firm. In November, regulators forced Ant Group, the finance affiliate of Alibaba, to suspend plans for what would have been the world’s biggest initial public offering (IPO), while the company dealt with regulatory changes. Last month, Alibaba and two other firms were slapped with a fine for not making the proper declarations to authorities about past acquisitions. But this does not mean Beijing is working in opposition to its tech champions, according to Emily de La Bruyere, co-founder of consultancy Horizon Advisory.
“These multinational tech companies are decidedly the force enablers that China uses to extend its information and standards strategy globally. That’s not going to change. We’re not going to see Beijing turn on its Big Tech the way Washington appears to be,” Bruyere told a new channel.
“But, Beijing is going to ensure that its Big Tech acts by its rules and regulations, connect to its platforms, and serves its strategies.”
EU tech regulation in the U.S.
China is bringing a huge change in tech regulation. Moreover, the European Union has perhaps the most aggressive region in the world on the issue. In 2016, the General Data Protection Regulation was approved and sought to bring in rules around how user data was processed. In December, the EU introduced the Digital Markets Act, and the Digital Services Act aims to bring stricter controls over the behavior of the tech giants in a large number of areas.
The U.S. has taken a similar approach with wide-ranging legislation around areas like data.
Trivium China’s Schaefer said, “We don’t have good data regulation in the U.S. yet. So we don’t have that foundation, those kinds of basic fundamental principles, on which we can regulate, not only our domestic companies but foreign incoming companies as well.” “I think that us not having that fundamental data policy is one of the reasons that we are taking this bizarre scattershot approach to try to control incoming Chinese apps like TikTok, targeting specific Chinese companies because we don’t have a universal regulation.”
Schaefer was referencing the ongoing saga of Washington trying to get Chinese company ByteDance to sell the U.S. operations of TikTok.