China vowed to curb the influence of technology companies and root out corruption tied to the “disorderly” expansion of capital, a sign that authorities may expand a regulatory crackdown that erased more than $1 trillion of market value last year.
In a sweeping communique following the plenary session of the Chinese Communist Party’s top anti-graft group, the government said it would break the ties between money and power, and tackle corruption in a range of industries. It also pledged to target political factions and interest groups within the party, the official Xinhua News Agency reported Thursday.
“Efforts will be made to investigate and punish corrupt behaviors behind the disorderly expansion of capital and platform monopolies, and cut off the link between power and capital,” the Central Commission for Discipline Inspection said in the statement. “Show no mercy to those who engage in political gangs, small circles, and interest groups within the party, and strictly educate, manage and supervise young cadres.”
The comments suggest President Xi Jinping’s government isn’t finished with a regulatory onslaught that upended industries from e-commerce to education and ride-hailing last year. They also served as a warning for Communist Party officials to keep their heads down ahead of a once-in-five-year meeting later this year, at which Xi’s expected to secure a third term in office.
Alibaba Group Holding Ltd. took a hit Friday, falling 3.4% in Hong Kong after China’s Central Television network aired a five-part documentary series, “Zero Tolerance,” to coincide with the anti-graft meeting.
An episode Wednesday night featured Zhou Jiangyong, the former party chief of eastern Hangzhou city, who allegedly used his influence to help his younger brother’s businesses — one of which included Jack Ma’s Ant Group Co. as an investor, according to a local media report in August.
While CCTV made no mention of the link to Ant in the documentary, the timing may have spooked investors. The company’s representatives didn’t respond to a written inquiry seeking comment.
Another CCTV episode revealed how Sun Lijun, former vice public security minister, received bribes worth $14 million in small seafood boxes. He also faces charges of stock manipulation and gun possession.
The communique Thursday night called for strictly enforcing anti-corruption efforts in elections, infrastructure projects and transactions involving public resources, with an emphasis on defusing hidden debt risks in local governments.
Earlier this month, the anti-graft body placed the chairman of China Life Insurance Co. under investigation in a surprise move. A nationwide anti-corruption crackdown focusing on financial institutions and regulators has netted more than 20 officials since its start in October as authorities step up scrutiny of the nation’s $54 trillion financial system.
Adding further uncertainty to the outlook for tech firms, Reuters reported earlier this week that China’s internet regulator would require tech companies to seek approval before making investments or raising funds. The Cyberspace Administration of China said the reports were untrue. –Bloomberg
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