tech, business
Beijing's Control Strategy
China’s tech stocks has staged a big rally. Hong Kong Hang Seng tech Index which is stacked with Chinese companies has soared almost 60% since its low’s last October. This comes as the country reopens and as Beijing’s lift his crack down on technology companies.
China's ambitions to gain a foothold in the tech world will soon be realised. Beijing's control strategy is a way to keep all major companies in China, thereby keeping all Chinese citizens under the Communist Party's dominance.
Quieter investment plan
Started back in 2015 the Chinese government came up with the proposal to buy stake in technology companies. Usually 1% stake and aboard seen in some influence over the content this private news companies or content companies are putting out.
In 2016-2017 Chinese state group started taken small stakes in start-ups and it grows in size from there. However, most recently the buying strategy expanded in large companies such as Alibaba and Tencent.
It is both about, controlling content and to keep tech companies growing, especially now considering the circumstances. Their economy recovers and their employment rises after several lockdowns and foreign investors running away from China.
The Rise of Golden Shares
The government decided to take this 1% stake to get influence over these companies but not in such a heavy handed mannered as the tech crack down did.
It gives them control on how those companies are operating and specifically gives them direct say on content which is always been what the communist government was always focus.
Although, the Beijing’s purchase in ByteDance company who owns the social media company TikTok, bought a 1% stake in the company which allowed them to name a state director.
controversially nominee
His name is Budjyu Khgan which about a couple of years ago he attracted attention for saying very nationalistic stuff online. He called all liberal Chinese traitors and told them to go to hell for preaching human rights in freedom.
He’s now has a say over the top three executives of the platforms and if the company wants to do any acquisitions or distribute profits, he’s now involved in as a board member.
China has decided to move to take a majority stake in tech companies to gather data it needs to make decisions that will impact their future. The country sees this as an opportunity for them to gain an edge in the global market, and they're willing to invest heavily in order to get it.
They see technology companies as a long-term investment, and are eager to get in early on the next big thing. As we speaking, China has been making warnings in regard to American companies and some of the biggest tech players in Europe. The partnership will give them access to a wealth of information that can be leveraged to grow their own economy.
The Bottom Line
China’s bold move coming after legitimate worries about their own growth and the United States as a competitor. They want to make sure that they don't fall behind and compromise their strategic position in the international markets.
The country has been allocating billions of dollars into research initiatives such as ‘Baidu Brain’ in the last couple of years. They want to make sure that their companies are at the forefront of developments in AI and robotics.
They already control how these technologies will be used, which means they need to have a say present and future in who gets access to them first.