Beijing leaves antitrust out of 2022 economic goals, focuses on technological development
- A meeting of the Communist Party’s Politburo left out mentions of the ‘disorderly expansion of capital’ that last year signalled a widening tech crackdown
- The government continues to emphasise technological self-sufficiency and innovation as it seeks to address slowing growth amid pressure from Washington
China’s top policymaking body emphasised the country’s drive for technological self-sufficiency and innovation to address economic growth in 2022, shunning mentions of antitrust and the “disorderly expansion of capital” that 12 months ago signalled a tumultuous year of crackdowns on the technology sector.
Speeding up the implementation of technology policies, tackling key technologies and improving supply chain resilience are among Beijing’s top economic goals for the year ahead, according to meeting notes from Monday of the Communist Party’s 25-member Politburo, chaired by President Xi Jinping, that were published by state-run Xinhua News Agency.
Boosting technological self-reliance remains an important goal for Beijing as the government prioritises economic stability while continuing to grapple with a protracted tech war with the US. Tensions with Washington have strained trade relations, especially in semiconductors, as US sanctions have curtailed some Chinese companies’ access to advanced chip-making technologies.
The meeting notes mentioned strengthening companies’ role as drivers of innovation and achieving a “virtuous cycle” of development among the technology, industrial and finance sectors, according to Xinhua.
The focus on technological development is part of Beijing’s effort to emphasise economic and social stability for 2022, when the government will hold the 20th National Congress, which is expected to end with Xi being granted an unprecedented third term as head of the government.
The meeting coincided with the easing of some economic policies this week. The People’s Bank of China said on Monday that it will cut the reserve requirement ratio for major commercial banks by 0.5 percentage points, releasing 1.2 trillion yuan (US$188 billion) worth of long-term liquidity into the interbank system on December 15 to boost the Chinese economy amid signs of slowing growth.
The policy shift comes after political crackdowns have taken a toll on China’s once high-flying tech sector. In a series of sweeping legislative and regulatory moves this year, Beijing has targeted Big Tech companies over monopolistic practices, private online tutoring, video games, data and cybersecurity practises and cryptocurrency mining. The string of bad news has hammered Chinese tech stocks on the Hong Kong stock exchange, wiping out more than US$1 trillion in value.
Those moves were foreshadowed by the same Politburo meeting last year, which identified tackling the “disorderly expansion of capital” and monopolistic practises as key economic goals for 2021. The meeting took place a month after Beijing scuttled the highly anticipated initial public offering of Ant Group, the fintech affiliate of Alibaba Group Holding, owner of the South China Morning Post.
In August, Xi said at a central leadership meeting that Beijing’s campaign against the “disorderly expansion of capital” and “barbarous growth” in the tech sector was beginning to bear fruit. Xi also warned that the Communist Party must do more to “guide and supervise” the country’s businesses with clear rules, effective regulations and greater policy transparency.
While Beijing has long prized economic self-reliance, its initiatives in the tech sector have ramped up since 2019, when Washington blacklisted Huawei Technologies Co, the world’s largest telecoms equipment maker.
Last month, the Central Comprehensively Deepening Reforms Commission, an agency headed by Xi, approved a three-year plan to revamp its state science and technology system, addressing weaknesses and institutional barriers hampering the country’s technological advancement. Details of the plan were not made public.
Meanwhile, Vice-Premier Liu He, Xi’s right-hand man who is leading China’s efforts to address US restrictions, wrote in a lengthy article last month in People’s Daily – the official mouthpiece of the Chinese Communist Party – that technological innovation is not just a matter of development, but also of China’s very survival. Technology, he added, is also key for avoiding the middle-income trap.
Author: Xinmei Shen, SCMP