I'm looking at how China's currently pummeling their tech sector for the sake of...

russli1993 · on Aug 9, 2021

First of all, saying China's actions against tech sector is for the sake of the ccp, or that ccp simply felt they are too big is a narrow way to look at it. And makes the regulatory actions as a political game and not legitimate. You need to look at case by case. I argue each case has a legit issue, and in many of the cases, government is enforcing the laws that already exists but weren't enforced earlier. Chinese government didn't place any regulatory burden on tech sector earlier. But as the tech sector grew, there have been significant issues: 1) consolidation of power and use dominate market power to negatively affect the competition 2) Vast collection of personal data, commercializing personal data detriment to privacy 3) Use of algorithms and big data to detriment of consumers or workers. Ex: Tests shows that Didi chuxing show more expensive prices on a device you use to order multiple times before than a device you have not for the same trip. meituan's delivery algorithm drives delivery workers to the extreme. The delivery algorithm also gets harder if you work harder, resulting in ever intensive work condition, and they penalizes you each time you can't meet the algorithm.

I can present my points for supporting each of the regulatory actions but I won't go into details here. Overall, my view is that these regulatory actions are overdue. It doesn't mean we don't want tech sector. The society is a web of relationships between entities. Any time an entity that has a lot of advantage over another party, I argue that the red line should at least be that the more powerful entity shouldn't use its power to the detriment of the weaker party. The role of the government and laws should be to at least be to prevent that from happening. In terms of tech, the relationship is tech company vs its competitors, vs consumers, vs workers. In these relationships, a tech company can have significantly more advantaged because data it collected, characteristics of a digital business, network effects and capital. And if the weaker party is negatively affected because of the interaction between the powerful entity and the power difference, that should be a sign that public power should step in to either protect the weaker party or increase weaker party's power.

In regards to environment. I can list specific actions Chinese government took just recently: 1) A carbon credit and trading system is operational. The first batch of companies required to tally carbon credits and purchase credits include 2000 companies in the power generation sector, covering an emission of 4 billion tons of co2 annually. Steel, metal, cement, petro-chemical sectors will also be included as the plan progresses(https://www.reuters.com/article/china-carbon-market-0714-wed...) 2) Government is ordering more crude steel capacity reduction, can you imagine any country where the government is forcing businesses to reduce production and capacity 3) Aug 1, government removed export tax benefit for 23 types of steel, and placed export tariffs up to 40% on a few types of steel. Does any other country has self imposed export tariffs? The purpose looks like reduce exports of energy heavy, pollution heavy, and low margin metal products. Aiding steel capacity reduction. (http://finance.people.com.cn/n1/2021/0801/c1004-32177024.htm...) 4) Many state owned companies, such as state grid, petrochina now have even more green development tasks and initiatives. For example, more ultra high voltage DC powerlines are being built. This removes one of the primary adoption blocker for more renewables in china. One of the successful development model is villages in the western provinces are building solar farms, the revenue from power sales are dividend given to the local people, increasing renewables at the same time increasing people's income. And some villages in the dessert, have found its even possible to grow plants under solar panel's shade where before the sun was too strong. Now they have agriculture + solar energy development parks. Solar, wind, hydro installation are all increasing. In terms of industry and private sector, EV sales continue to grow, I believe EVs in China, given the quality of the products, market competition and gains in infrastructure, is starting to reach the consumer acceptance. Sales of Chinese companies in green sector, such as CATL is growing by a lot, stocks reaching all time high.