Alibaba has a “big accident”, what will the Chinese technology world be like?

12/30/2020 11:53 GMT + 7

Many entrepreneurs shared that the storms encountered by Alibaba or Ant Group made them feel confused. Many experts also worry that China will return to the 1950s, a time of tough policy application on private investors.

After the Chinese authorities announced the opening of an antitrust investigation against the Alibaba Group last week, the tech company’s shares have experienced consecutive declines, with a time of up to 20%. treatment. But not only that, it feels like investors are also “fleeing” from other top Chinese tech companies.

Earlier this week, Bloomberg estimated that shares of major Chinese tech companies, including Alibaba, Tencent, and Meituan, had lost about $ 200 billion in value, within days of their business. billionaire Jack Ma was reported bad news. After that, the Chinese technology world recovered slightly on the stock market, but what is waiting for them is not sure.

Since the beginning of November, Tencent shares have fallen by 15% in value. Meituan is down about 1/5 compared to the peak of last month. “There are a number of signs that many Chinese technology companies are falling under the radar of the government,” said Bruce Pang, an expert at financial investment firm China Renaissance Securities.

Bloomberg estimates that the shares of major Chinese tech companies including Alibaba, Tencent, and Meituan have lost about $ 200 billion in value, within days of Alibaba’s investigation.

Many entrepreneurs shared that the Chinese government’s handling of Alibaba or Ant Group, another Jack Ma company, made them feel confused. “You can have absolute control, or you can have a dynamic economy. But it’s hard to have both,” said Fred Hu, founder of investment firm Primevera.

Anyway, the Chinese authorities increasingly see the growth in size and influence of the tech giants as a potential threat. Many experts are also concerned about the prospect of China going back to the 1950s, a time when tough policy was applied to private investors.

Of course, Ma’s relationship with Chinese officials is also more turbulent than usual. Pony Ma, Tencent’s founder, and Baidu co-founders Xu Yong and Li Yanhong don’t have as many shocking blunt statements as Jack Ma. However, the technology giants are still hard to avoid disadvantages.

Jackson Wong, director of asset management at Amber Hill Capital shared, “The Chinese government is putting pressure to have more control over technology companies. Alibaba, Tencent or Meituan have grown at a speed deemed by Beijing to be too fast and on a large scale.

Under China’s antitrust law, which is now being revised to govern the entire Internet industry, companies can penalize up to 10% of their revenue. If applied to the case of Alibaba, the fine is up to 7.8 billion USD.

“We believe that the new antitrust laws will have a negative impact on major Internet companies, which have a leading position in different segments of activity,” commented Morgan Stanley.

In a regular meeting more than a week ago, which set the direction of national economic policies in the coming years, the Chinese authorities reaffirmed their determination to implement antitrust measures and prevent development. lose control.

Experts say that Beijing is looking to further tie technology companies with national interests. In the trade war between China and the US, companies that do not have a clear political position can fall victim.

On the other hand, the Chinese government is showing preference for the domestic chip industry, in an effort to increase technology autonomy. Tsington firm has raised $ 5 million to build chip foundries in China. Intellifusion, another chip maker based on Machine Learning, raised $ 141 million in April this year.

Hero(According to Tech Crunch, Bloomberg)

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