China’s Big Tech Crackdown and Their Inability to Take Criticism
By: Beckett Dubovik
TikTok, Clash Royale, League of Legends. If you are active online or follow popular trends, chances are you have heard of these apps. All the aforementioned apps have one similarity: they are owned by Chinese parent companies. In recent years, these billion-dollar tech companies, such as Byte Dance, Tencent, Alibaba, and Baidu, have all experienced extreme growth. Many different factors have led to this growth. The popularity of their apps and services and the COVID lockdowns in China kept people indoors, which in turn led to more internet usage. China’s decision to block American tech companies such as Google, Facebook, and Twitter has allowed their Chinese counterparts to offer services without any competition in China. Over the past year, China has started to take notice of these companies’ large growth and their increasing tendency to criticize China’s strict regulations. The Chinese government has responded by fining companies for data security issues and monopolistic business practices. China has claimed that its crackdown on big tech companies is to help rectify antitrust practices and prevent the monopolization of tech companies, as well as improve the industry overall. Despite this, China seems to have other motives for its crackdowns. They have been explicitly going after companies that have criticized the government’s financial regulations or have overstepped the boundaries that the administration wants them to stay within.
Chinese Tech Giants have experienced major growth over the past decade
In many cases, these big tech companies have chosen to abide by China’s policies. In October 2020, Jack Ma, the founder of the Alibaba Group, presented a speech at the Bund Finance Summit. In his speech, Ma talked about the importance of the tech industry in China and noted regulations that the Chinese government had placed on the industry. He specifically claimed that the Chinese government “needs more ‘policy experts’, not ‘document experts.’” Ma likened “document experts” to people who simply say what a company can do and what it can’t. “Policy experts,” he claimed, are those who create policies to incentivize development within an industry. Six months later, Alibaba was given a 2.8 billion dollar fine from the Chinese government, the reason being “disorderly expansion of capital.” Shortly after, Alibaba offered a conciliatory message where it claimed that the fine was a “wake-up call” and was made out of “care for the development of the industry.” These kinds of apologies are very common in China, legitimizing China’s regime in the process. If big tech wants to fight against China’s policies, it is essential that they give their users greater freedom to utilize their freedom of speech, regardless of the fine.
China’s crackdown on tech not only fringes upon personal freedom, but also global economic opportunity. Didi, a ride-sharing app that is the Chinese equivalent of Uber, listed an IPO on the New York Stock Exchange in June 2021, coincidentally on the eve of the celebration of the Chinese Communist Party’s founding. The Chinese government interpreted this as an insult. Despite Didi’s attempts to go global by doing business with America, China’s government retaliated against Didi, placing the company under investigation and removing their app from stores. Then, in order to make the message clear, Beijing made it a requirement that tech companies seek permission from the government in order to do business abroad. This change, in particular, has impacted tech companies the most. If any of these companies want to expand outside of China, they have to get permission from the Chinese government, which has recently become paranoid about the possibility of its own citizen’s data falling into foreign hands. If China continues to retaliate in this manner, many tech companies will lack major financial opportunities for global economic success.
Tencent only started to recover from the crackdown in June, after losing nearly 500 billion dollars in market value
China has yet to enact more regulations on tech corporations. Nonetheless, with many companies still recovering from major fines and economic barriers, it is unlikely that they will attempt to overstep any boundaries established by China’s government again. Ultimately, China’s inability to accept criticism is an indicator of the country’s increasingly authoritarian policies. If big tech wants to fight against these policies, protecting the rights of their users, as well as their financial interests, it is imperative that they start searching for solutions now.
