Fascinating how the Chinese authorities seem to be regulating the these companies with complete disregard on how the stock market might react.
I personally regard this as a positive fact, and I'm generally against the policies of the current Chinese authorities. The stock market should not be the be-all and end-all of our modern society.
Countries and companies have a lot in common. Consider this analogy: would you want to join a company that has an excellent business model and is poised for strong growth, but the CEO is a nut case and has done several mass layoffs that have completely blindsided internal and external people?
I, for one, am happy that China is tripping over itself and will give us a bit more room to breathe and figure out our own mess, so that when the inevitable takeover of Taiwan and all the other shit storms happen in the future, we'll be at least a tiny bit more prepared.
when stocks are up they feel richer and spend more money at stores etc.. (the wealth effect)
whether or not you agree with this approach, the fed and congress care alot about the stock market for good reason.
i just wish it wasn’t all they cared about
And a repressive Communist government should be?
The CCP will forgo economic might (in this sector) for social stability and control every time. They do not want these titans to have more power or influence than they have so they rein them in and let them know who holds the straps.
Centralized power is good (if that's what you want, and it seems like that's the MO of the CCP).
They just need to control it.
They should want Tencent to take over the world - with them in complete control of Tencent (which they basically already are).
Why should the CCP afraid of Tencent getting big instead of trying everything they can to make Tencent and ByteDance etc bigger?
Whether China's approach is wise or not...I don't know.
Yes various interests lobby the government all the time. But what are the best/clearest examples of the market tail wagging the policy dog?.
I mean, that's fairly normal, surely? _Any_ aggressive regulatory action is going to upset the stock market; it regulatory bodies had to take the stock market's delicate feelings into account they might as well shut their doors.
China's semiconductor company spiked today on the stock market.
Or does this regulation lower the price so institutional investors get a discount?
1. the og investors cashed out. leaving retail holding the bag.
2. they buy the stock at a discount
Even better, they're intentionally redirecting finances away from companies they don't like.
The stock market reaction is a part of the show. They aren't banning things despite it, they are actually flexing to show authority (albeit in a crude manner).
If governments can actually be that successful in dicating and operating businesses, then the communism world would never have failed so miserably, the control the Chinese government has over companies is really no more than that of the United States governments (from federal to local), just look at how the federal governments banned all kinds of business activites, how the `do no evil` company bidding for defense contract. It's a pity many of the readers live in the imaginative world where the US is free of all evils, with China being the opposite.
The stock market is just a facade, a theatre, to appear to the West that Chinese economy is somewhat legitimate. In reality everything is in CPC hands and all these companies only appear to be private.
China’s Millionaires Visit Communist Revolution Sanctuary Clad in Military Uniforms of the Era
https://japan-forward.com/chinas-millionaires-visit-communis...
Even Hong Kongers couldn’t register Americans at the time.
Consensus in some quarters is that a Maoist crackdown akin to the cultural revolution may be starting up.
Other companies have been hammered such as all cram schools have been "told" they will not only not be allowed to issue stock (IPO) but possibly no longer allowed to be for-profit but must be non-profit now.
https://www.newsdirectory3.com/china-bans-cram-school-busine...
https://www.bloomberg.com/news/articles/2021-07-23/china-is-...
100 flowers/Great Leap Forward. Cultural Revolution/Deng reforms. Tiananmen/hypernationalism.
Tech has enjoyed a relatively open hand for two decades. Now the fist is closed and comes smashing down. Justification for clampdowns, crackdowns and purges are really about CCP leaders using all tools at their disposal to maintain a hold on power.
So by comparison we are taking the highly successful policies of Reagan and Nixon… perhaps with the Japanese internment camps and dropping nuclear weapons thrown in? (For a similar time period in the US)
It's not like the world is static.
I remember when the "great firewall" seemed like a joke, as did digital copyright compliance, online censorship or basically any means of controlling the internet. Information wanted to be free, and neither man nor king could stand in its way.
Maybe that is true, and the last 15 years have been an aberration. But... that would mean a reversal of a trend, not a continuation of the current one. To me it seems likely (careful with inevitabilities) that the internet will increasingly become a way of controlling people.
