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Thursday, August 11, 2022

CHINA TIGHTENS GRIP ON BIG BUSINESS #417

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Mr Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

Nikkei Asia reports today that China’s Tech companies will face stiffer penalties for crossing “Beijing’s red lines on Competition” following approval by the Standing Committee of the National People’s Congress of changes to China’s Antitrust Law.

AS a consequence the Tech Giants will face legal repercussions if they force customers to operate only on one platform –  a practice known in China as “choose one from two”. In April 2021, China’s antitrust authorities imposed a USD2.7bn fine on Alibaba for abusing its dominant position. The changes will significantly increase fines for companies that fail to report mergers and acquisitions to the regulators. The original maximum fine of 500,000 RMB has been scrapped as too low to deter the big teach groups. 

Professor Sun Jin of Wuhan University informed the media in China that “The stronger authority granted to the anti-monopoly law will limit the anti-competitive profits sought by Big Tech executives”. Prof Sun adds, significantly, that the changes will “create a framework for achieving common prosperity”.

What is the West to make of these changes? What is ‘Common Prosperity and how does it affect Big Tech and Billionaires? Isn’t China building a socialist society? Isn’t China aiming at an egalitarian society, free of classes and an end to the distinction between employers and employees?

Little has been written by theorists about the construction of a socialist society and students look in vain for guidance from Marx’s Critique of the Gotha Programme and Lenin’s State and Revolution. China’s focus remains on the creation of a society based on prosperity and stability where the Party, and not the Capitalists, remain in control of the challenge to take China from its position in 1949 when it was widely known as the Sick Man of Asia to 2049 when its citizens will enjoy a respectable level of well-being. Some will enjoy more than others but the term “Common Prosperity” underlines the goal of the Party to reduce, but not eliminate, the differences. That will come much later.

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