Beijing's crackdown on private businesses led to downfall of Chinese market: Report

Chinese Communist Party’s (CCP) increased influence and crackdown on the private businesses has threatened their interests and has led to the downfall of the Chinese market, adding to the communist nation’s economic challenges, ANI reported, citing the Hong Kong post on Tuesday. Chinese president Xi Jinping has tightened the grip on the private sector as his administration ramped up some of the most stringent regulations for high-profile industries. As a result of the government’s intervention, some of the top Chinese companies have disappeared from the "Global Top 10" list due to several years of market capitalisation, the report on Feb. 1 revealed.  Since 2007, the Chinese companies have struggled to make it, and there have been just four Chinese firms out of ten that somehow made it on the global list.

CCP's ‘party first, business second' approach results in businesses' poor performance

In 2021, though, this figure dropped even further as only two companies Alibaba and Tencent, and zero made it on the top 10. Interestingly, Taiwan Semiconductor Manufacturing Company (TSMC) emerged as the only global firm and only Asian company that held its position. Chinese companies’ inability to compete can be attributed to the 2008 Chinese financial crisis. But majorly it is the Chinese Communist Party’s ‘party first, business second’ approach that has turned Big Tech into the biggest victim of the recent crackdowns and poor performance on the global scale. 

“Until 2019 the CCP believed companies do not exist for public service, they exist for profit. But now business climate in China suffers from a hurricane,” Hong post states in the latest analysis. 

China’s communist party now dominates major tech companies, as well as online brokers, and appears to bar them from offering offshore services. “Meaning a ban on stock trading in foreign markets and keeping Chinese money in borders,” explains Hong Kong post. Evergrande, a giant firm in China dealing in real estate and several other ventures has also run into mounting debt problems, that later needed the government to intervene.

“By intervening it is creating a graveyard for the dragon it claims to be. It is no longer a crackdown, rather a symbol of the insecure dragon trying to dominate the Chinese mind and body from challengers like big tech and social media,” noted Hong Kong Post. In 2021, China’s crackdown on private enterprises led to the loss of a whopping $1 trillion off the market value for the businesses.