China Sounds Upbeat Notes for Platform Companies

Credit: Visual China

BEIJING, July 13 (TiPost) — Chinese Premier Li Qiang encouraged platform companies to maintain confidence, keep innovating and improve their international competitiveness at a meeting on Wednesday.

Li also called on the companies to better empower the real economy, create jobs and proactively fulfill their social responsibilities during the meeting after platform companies like Ant Group were fined heavily last week.

At the meeting held on the heels of a years-long regulatory overhaul of Ant Group, Li listened to opinions and suggestions of representatives from the country’s major platform operators on promoting the standardized, healthy, and sustainable platform-economy development.

Representatives from the major platform companies attended the meeting, including Xu Ran, the CEO of Chinese e-commerce platform JD.com, Zhao Jiazhen, the Co-CEO of PDD Holdings, Wang Jian, the founder of AliCloud, Zhang Lidong, the Chairman of ByteDance, Wang Putizhong, the Senior Vice President of Meituan and Qu Fang, the co-founder of social media platform Xiaohongshu.

The platform economy has boosted demand, provided an engine for innovation and development, created new channels for employment and entrepreneurship, and offered support for public services. It has taken an increasingly prominent position in China’s overall development and would have a more significant role as the country embarks on a new journey to transform itself into a modern socialist country, Li said.

Li stressed that governments at all levels should strive to create a fair market environment for competition and improve policies on investment access and security assessments for new technologies and businesses. The governments should also optimize the transparent and predictable regulatory systems to reduce the compliance costs of those enterprises and promote the sound development of the industry, Li added.

On Wednesday morning, the National Development and Reform Commission (NDRC) unveiled typical cases of platform enterprises in supporting

scientific and technological innovation and the transformation of traditional industries, including Alibaba, Tencent and Meituan.

The NDRC said the country’s top 10 platform companies in terms of market valuation have stepped up investments in fields such as chips, autonomous driving, new energy and agriculture in the first quarter of this year, an increase of 15.6 percent compared with the previous quarter.

On July 7, the People’s Bank of China (PBOC), China’s National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC) jointly announced that since November 2020, from the perspective of strengthening supervision in accordance with the law and effectively preventing risks, the financial management authorities have urged and guided the Ant Group, the Tencent Group, and other large-scale platform enterprises to rectify the problems of illegality and irregularity in their financial activities. At present, most of their prominent financial problems have been resolved and they are under regular supervision, which marks the end of years of regulatory overhaul of several Chinese fintech giants.

The platform economy was a key focus of the regulatory policy and plays a crucial role in stabilizing employment as an important part of the private sector.

The change of the attitude towards the platform economy from preventing the disorderly expansion of capital to supporting its development indicates a new stage of development for the platform economy, according to Zhong Zhengsheng, chief economist at Ping An Securities.

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