Hello and welcome back to, a digest of recent events shaping the Chinese tech landscape and what they mean to people worldwide.
The question for thehas become: Who is Beijing’s next target? Regulatory clampdowns are common in China’s , but the breadth of the recent moves has been unprecedented. No major is exempted, and everyone is being attacked from a slightly different angle. Still, Beijing’s message is clear: Tech businesses are to align themselves with the interests and objectives of Beijing.
Education curbs hit tech giants.
The government’s motivationideological. It could lead to policies that to ease pressure on students and parents. Recent orders from Beijing have strictly limited after-school tutoring. However, they also sparked a wave of sympathy for teachers who work at lucrative tutoring centers to compensate for their meager salaries.
The effects of the education crackdown are also trickling down tocompanies. For the past few years, ByteDance had been aggressively through a hiring and acquisition spree in part to diversify an ad-based video business. Its plan seems to be in shambles as it reportedly plans to following recent the clampdown.
The restraints are also hitting American companies. Duolingo, the language learning app,. At the same time, it’s not immediately clear whether the action resulted from any policy change; the government recently, along with its restraints on extracurricular, .
Games are opium
It could be tricky to read the top leaders’ minds because their messages could come through various government departments or state-affiliated media outlets, carrying different weights.
, Tencent is in the authorities’ crosshairs. was wiped after the Economic Information Daily, an economical paper supervised by China’s central state news agency Xinhua, published an article (which was taken down shortly) describing video games as “spiritual opium” and cited the significant role Tencent plays in the industry. Shares of Tencent’s smaller rival, NetEase, were also battered.
the government slammed Tencent and the gaming industry ment for their impact on underage players. Tencent has been working to appease the authorities by introducing protections for , such as tightening age checks several times.
Tencent, which has a sprawling online empire of social networks, payments, and music on top of games, has promised to. And following the recent op-ed from the state paper, Tencent the time and money children can spend inside games. But after all, the company still depends mainly on addictive game mechanics that lure players into opening loot .
Fix the algorithms
The other camp offeeling the heat is those dependent on machine learning algorithms to distribute content. The Propaganda Department of the Chinese Communist Party, the country’s watchdog of public expression and several other government organs, issued an to “strengthen the study and guidance of online algorithms and carry out oversight over algorithmic recommendations.”
The government aims to assert more control over how algorithmicaffect what information people receive. Shares of Kuaishou, TikTok’s archrival in China, tanked on the news. Since its in February, Kuaishou’s stock price has tumbled . Meanwhile, the Beijing-based short video firm is one of its overseas apps, Zinn, which has caused controversy over plagiarism. But its overseas user base is also rapidly growing, crystalizing in recently.
End of “two-choose-one.”
The. On Friday morning, The Wall Street Journal that the country’s antitrust regulator is preparing to fine Meituan, China’s central food delivery platform, $1 billion for allegedly abusing its market dominance. In 2020, Meituan or $17.7 billion in revenue.
Until recently, forcing suppliers towas common in China’s e-commerce world. Alibaba did so by forbidding sellers to list on rivaling platforms, an approach that resulted in a . We will see where the government will act next as it continues to curb the power of its tech darlings.