The government of China has unveiled a 5-year plan which is outlining tighter regulation for its economy. It says that new rules will be covering the areas of technology, monopolies, and national security in the economy. This plan came after Beijing’s targeting of education and technological industries. The country is saying that the corporate crackdown will now last for years.
The document is referencing Chairman Mao as China is celebrating 100 years of its communist party. China’s State Council and the Central Committee of the Communist Party have released it jointly.
The laws will get stronger for important fields like science, culture, education, and technological innovation. The plan also said that the government is aiming to tackle both the monopolies and “foreign-related rule of law.”
Regulations of China’s digital economy will also go through a review process. This announcement has raised fresh concerns regarding the corporate crackdown in Beijing. Also, this crackdown is all set to continue for more years in the future.
Shares of many Chinese companies have fallen sharply this year. Investors are now having concerns about the growth of this crackdown. Beijing has also come up with the launch of anti-monopoly investigations for some of the biggest tech firms. It has also taken action against a wide range of businesses.
In April, the tech giant Alibaba accepted a record $2.8bn fine. An investigation has found that it has abused its market position. Tencent ended its exclusive music listening deals with record labels. In July, some of the biggest online platforms like QQ, Kuaishou, Taobao, and Weibo received the order to remove inappropriate child content.
Chinese authorities also said that they had increased their activity for education. One person and six institutions have received punishment for offering after-school tutoring. The move is coming as tutoring firms have changed their way of operating after a crackdown in the industry.
However, the new rules said, “Curriculum subject-tutoring institutions are not allowed to go public for financing; listed companies should not invest in the institutions, and foreign capital is barred from such institutions.”
This week the banking and insurance watchdog has stepped up for its regulation on online insurance companies. Also, it has ordered the firms to stop improper marketing and pricing, or they will face punishment.