Beijing warns private sector to buckle up . . .
Yesterday, China released a 10-point plan to strengthen regulatory control over key sectors of its economy. The policy document, jointly released by the Party’s Central Committee and the State Council, aims to use government legislation to build a regulatory environment for an increasingly digital economy. The plan’s release follows nine months of regulatory measures and crackdowns that have stunned tech investors in China and abroad. The plan is a clear signal from Beijing that more crackdowns are to come while hinting at the direction and breadth of future regulatory overhaul.
Laying the foundation of a new economy . . .
China’s renewed regulatory zeal has taken many by surprise. Still, it is all part of China’s long-term plan to strengthen the Party’s control over critical sectors of the economy such as technology, health care, and education. The document itself lays out guiding philosophies, principles, and overarching goals through the end of 2025. It calls for increased government actions in fields such as economic adjustment, market supervision, social management, public service, and environmental protection. News of the plan has caused shares in many Chinese companies to fall sharply as investors fear the growing crackdown will hurt companies’ bottom lines. But at least now they have some idea of the scope of the regulatory reset.
Canada, keeping pace . . .
Canada is both financially and strategically affected by this new plan. Canadian companies and investors operating in China have already been gravely affected by China’s clampdown on private education and tech companies. And in the years to come, China’s stated aim of developing legislation and regulatory oversight of fast emerging sectors such as Artificial Intelligence, big data and internet services will impact Canada’s strategic development of its digital regulatory framework with regards to national security protections, strategic platform alignment, and any goals it may have for international compatibility and consensus.
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