China will require the country’s biggest internet companies to get approval for any investment deals they make under new rules that could prevent Big Tech companies from getting even bigger through acquisition, people close to the issue told The Wall Street Journal on Wednesday (Jan 19).
The Cyberspace Administration of China, the company’s main internet regulator, recently enacted a new protocol that means internet companies must obtain formal approval for investment deals if they have 100 million or more users or they recorded revenues of at least 10 billion yuan ($1.57 billion). over the past year, people have told the WSJ. Some companies were notified of the changes this week, the report said.
The new rules would affect China’s biggest tech companies, including Tencent Holdings Ltd., Alibaba Group Holding Ltd. and ByteDance Ltd., all of which have over 1 billion active users. China’s Cyberspace Administration said on WeChat that it had not publicly announced any new rules. Tencent and Alibaba did not respond to WSJ requests for comment.
A spokesperson for Beijing-based ByteDance, which operates video platform TikTok, said Wednesday it was dismantling the strategic investment team, its venture capital arm, a move that people say meets the new rules. Dozens of employees will either be transferred or laid off.
Related: China’s five-year plan focuses on building a digital economy
Meanwhile, China’s State Council General Office announced this week that the digital economy is expected to be in place by 2025 and is expected to account for 10% of gross domestic product if successfully launched.
China’s five-year plan emphasizes digital innovation and says it should play a bigger role in economic development and focus on integration between digital technology and the real economy.
The plan includes efforts to accelerate the creation of an information network infrastructure, as well as an integrated national system of large data centers designed to coordinate data, computing power, algorithms and application resources. . Large enterprises will be encouraged to create integrated digital platforms to accelerate digital transformation and modernize commerce.
The Chinese plan says the construction of smart cities, parking lots and charging centers will be encouraged in newly built residential areas. Digitizing public services is also a priority, China said, and efforts will be made to ensure that digital social services reach more beneficiaries.
China is also looking to build a more controllable platform for non-fungible tokens (NFTs).