Page 9 - THE SOUTH CHINA BUSINESS JOURNAL
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vided a testing ground for the reform of nine key on tech exports – a response to similar measures
services industries. applied by the US – which has resulted in additional
licenses mandated for future exports.
Alongside the needs of developing the real economy,
China placed a great deal of emphasis on the China’s new personal data protection law, expected
financial industry. to be released in 2021, is yet another example of
efforts to introduce centralized and standardized
In fact, 2020 become somewhat of a milestone year law enforcement measures for businesses. The new
for the financial services sector – with the caps on law will operate on top of existing cybersecurity and
foreign ownership of securities companies, securities national security requirements and is set to offer
investment fund management companies, futures more explicit opt-ins for collecting data, restrictions
companies, and life insurance companies all lifted. on selling data to third parties, and government
The liberalization was further promoted in the approvals for cross-border data transfers.
Greater Bay Area , Shanghai, and Beijing regions.
China’s 2021 forecast
Moving forward, we will likely see the recovery of
more services industries such as – tourism, film, 2021 will be a promising year by most accounts,
and sports. Sectors that received a boost in 2020, punctuated by the release of the 14th Five-Year-Plan
such as healthcare and financial services, will likely in March and the 100th anniversary of the CCP in
see further digitalization and accelerated adoption of July.
innovative measures.
However, as the country prepares to turn a new page
Regulating the tech industry on COVID-19, it must also be ready to confront new
challenges that will certainly take its place. Ongoing
Another priority for China in 2021 is the bilateral tensions, K-shaped economic recovery, and
reinforcement of anti-monopoly behavior and achieving technology self-sufficiency are likely to be
preventing the disorderly expansion of capital – a some of the challenges that will beset China in the
point emphasized in the recent CEWC Report and foreseeable future.
again in the Central Bank’s Key Tasks for 2021.
Nonetheless, overshadowing these challenges will
Tighter controls have coincided with the exponential be the return of innovative and long-term reform
growth of the country’s technology industries, plans, and further opportunities for growth. Already,
triggering the first overhaul of China’s antitrust early estimates put China’s economic growth at 8.2
guidelines in 11 years. percent in 2021.
Towards the rear-end of 2020, high-profile probes In the coming months, investors can expect a
dominated headlines. An investigation was launched balance between further opening in the services
into Alibaba Group Holdings Limited over the sector, expansion of regional economic development
monopolistic practice of forcing merchants to choose zones, and stricter enforcement of rules for
to work with one platform at the exclusion of others. businesses operating in the Internet economy.
Shortly after, regulators ordered Alibaba’s affiliate
company, Ant Group Co. Ltd, to restructure its Further, in 2021, Beijing will also take aim at
lending, insurance, and wealth management services strengthening weak links in the supply chain – in
into a new more tightly regulated holding vehicle. order to strengthen national tech capacity and
achieve food security.
More of this regulatory tightening is expected in
2021, when the final version of the Guidelines for Though a multitude of announcements offer
Anti-Monopoly in the Platform Economy is released. glimpses into how China’s leaders view their most
So far, the draft guidelines are shown to have more pressing economic challenges and plans to overcome
‘teeth’ – to compel large tech firms to take corrective them, the speeches and plans should be consumed
action and allow more small players to operate in the with a pinch of salt.
growing digital market.
Investors can expect stabilization measures to
However, these antitrust laws and regulations are continue, sector and location-specific incentives to
not operating in isolation as market scrutiny is on stimulate industry and attract talent pools and inflow
the rise on many fronts. Last year also saw China of high-tech. However, this will be accompanied by
simultaneously revise its Copyright Law and Patent higher regulatory thresholds and industry scrutiny
Law to provide more legal certainty and strengthen – businesses should keep track of China’s new laws,
protections for businesses. Within the area of policies, regulations and remain nimble to any
technology trade, China imposed new restrictions changes that may occur.
SOUTH CHINA BUSINESS JOURNAL 6
services industries. applied by the US – which has resulted in additional
licenses mandated for future exports.
Alongside the needs of developing the real economy,
China placed a great deal of emphasis on the China’s new personal data protection law, expected
financial industry. to be released in 2021, is yet another example of
efforts to introduce centralized and standardized
In fact, 2020 become somewhat of a milestone year law enforcement measures for businesses. The new
for the financial services sector – with the caps on law will operate on top of existing cybersecurity and
foreign ownership of securities companies, securities national security requirements and is set to offer
investment fund management companies, futures more explicit opt-ins for collecting data, restrictions
companies, and life insurance companies all lifted. on selling data to third parties, and government
The liberalization was further promoted in the approvals for cross-border data transfers.
Greater Bay Area , Shanghai, and Beijing regions.
China’s 2021 forecast
Moving forward, we will likely see the recovery of
more services industries such as – tourism, film, 2021 will be a promising year by most accounts,
and sports. Sectors that received a boost in 2020, punctuated by the release of the 14th Five-Year-Plan
such as healthcare and financial services, will likely in March and the 100th anniversary of the CCP in
see further digitalization and accelerated adoption of July.
innovative measures.
However, as the country prepares to turn a new page
Regulating the tech industry on COVID-19, it must also be ready to confront new
challenges that will certainly take its place. Ongoing
Another priority for China in 2021 is the bilateral tensions, K-shaped economic recovery, and
reinforcement of anti-monopoly behavior and achieving technology self-sufficiency are likely to be
preventing the disorderly expansion of capital – a some of the challenges that will beset China in the
point emphasized in the recent CEWC Report and foreseeable future.
again in the Central Bank’s Key Tasks for 2021.
Nonetheless, overshadowing these challenges will
Tighter controls have coincided with the exponential be the return of innovative and long-term reform
growth of the country’s technology industries, plans, and further opportunities for growth. Already,
triggering the first overhaul of China’s antitrust early estimates put China’s economic growth at 8.2
guidelines in 11 years. percent in 2021.
Towards the rear-end of 2020, high-profile probes In the coming months, investors can expect a
dominated headlines. An investigation was launched balance between further opening in the services
into Alibaba Group Holdings Limited over the sector, expansion of regional economic development
monopolistic practice of forcing merchants to choose zones, and stricter enforcement of rules for
to work with one platform at the exclusion of others. businesses operating in the Internet economy.
Shortly after, regulators ordered Alibaba’s affiliate
company, Ant Group Co. Ltd, to restructure its Further, in 2021, Beijing will also take aim at
lending, insurance, and wealth management services strengthening weak links in the supply chain – in
into a new more tightly regulated holding vehicle. order to strengthen national tech capacity and
achieve food security.
More of this regulatory tightening is expected in
2021, when the final version of the Guidelines for Though a multitude of announcements offer
Anti-Monopoly in the Platform Economy is released. glimpses into how China’s leaders view their most
So far, the draft guidelines are shown to have more pressing economic challenges and plans to overcome
‘teeth’ – to compel large tech firms to take corrective them, the speeches and plans should be consumed
action and allow more small players to operate in the with a pinch of salt.
growing digital market.
Investors can expect stabilization measures to
However, these antitrust laws and regulations are continue, sector and location-specific incentives to
not operating in isolation as market scrutiny is on stimulate industry and attract talent pools and inflow
the rise on many fronts. Last year also saw China of high-tech. However, this will be accompanied by
simultaneously revise its Copyright Law and Patent higher regulatory thresholds and industry scrutiny
Law to provide more legal certainty and strengthen – businesses should keep track of China’s new laws,
protections for businesses. Within the area of policies, regulations and remain nimble to any
technology trade, China imposed new restrictions changes that may occur.
SOUTH CHINA BUSINESS JOURNAL 6
