Chinese Regulators Warn of Further Measures to Rein in Homegrown Tech Sector

China's efforts to rein in its homegrown tech giants gained new momentum on Thursday as its top financial regulators launched a fresh salvo on the sector and warned of future action against companies they say are flouting the country's rules.

The People's Bank of China, the country's central bank, said in a press conference on Thursday that anti-monopoly measures applied to Ant Group Co., an affiliate fintech company of Chinese tech conglomerate Alibaba Group Holding Ltd., will also be imposed on other payment firms.

Chinese authorities suspended the $34 billion blockbuster listing of Ant Group last November amid concerns over the risks the fintech company could bring to the country's financial system.

Chinese financial regulators, led by the central bank, in April mandated Ant to conduct a sweeping restructuring to turn itself into a financial holding firm, and distance its payment app Alipay from its other businesses.

Fan Yifei, a deputy governor of the central bank, told media on Thursday that monopolistic behaviors not only existed in Ant Group but also in other institutions.

Fan said new measures will be revealed soon, but didn't give further details.

China Banking and Insurance Regulatory Commission, the country's top banking regulator, in the same press conference on Thursday called out big internet platforms for charging high fees for referral traffic and vowed to take further action, in the latest efforts to lower financial burdens for the country's real economy.

Guo Wuping, a senior official of the commission, said that reducing fees for businesses didn't just involve banks but also other market players including big internet platforms profiting from referral traffic.

Speaking of future regulatory moves, Guo pledged to ramp up regulations on big internet platforms and other market entities offering financing to businesses.

The market mood further dampened after the State Administration for Market Regulation, China's top market regulator, announced it had required platform companies including Alibaba and Pinduoduo Inc. (PDD) to immediately look into online stores selling fake quality inspection reports.

The market regulator said in a notice on Thursday that it had also mandated local authorities to investigate into relevant inspection and testing institutes to maintain market order.

The move came a day after the market regulator fined a slew of tech companies for monopolistic behavior linked to nearly two dozen deals. The list of punished companies included tech conglomerate Tencent Holdings Ltd., and subsidiaries of Alibaba Group Holding Ltd., ride-hailing leader Didi Global Inc. (DIDI), and delivery giant Meituan.

The State Council, China's cabinet, revealed on Wednesday that it would step up labor protection in its platform economy, requiring platform companies to enhance rules and algorithms for order distributions and commissions.

Last week, the Cyberspace Administration of China launched an investigation into Didi, citing cybersecurity concerns, a day after the ride-hailing company held its initial public offering in the U.S.

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Corrections & Amplifications

This item was corrected at 12:00 p.m. ET. An earlier version misstated the name of Tencent Holdings Ltd. as Tencent Holding Ltd.

This item was corrected on July 9, 2021 to reflect that Chinese authorities suspended the $34 billion-plus blockbuster listing of Ant Group last November. The original version incorrectly said Ant's IPO would raise $37 billion in the third paragraph.

Tencent Holdings Ltd. is the name of the tech conglomerate. "Chinese Regulators Warn of Further Measures to Rein in Homegrown Tech Sector," at 1603 GMT, misstated the company name as Tencent Holding Ltd.

Chinese authorities suspended the $34 billion-plus blockbuster listing of Ant Group last November. "Chinese Regulators Warn of Further Measures to Rein in Homegrown Tech Sector," at 1603 GMT on July 8, incorrectly said Ant's IPO would raise $37 billion.

  (END) Dow Jones Newswires
  07-08-21 1203ET
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