driving the day
1. Big tech’s regulatory reckoning
On Monday, Chinese regulators took aim at monopolistic practices by China’s tech giants, drafting the first antitrust rules for the internet industry.
- The rules target behavior such as unfairly forcing users to choose between platforms, selling below cost to strangle competition, and improper use of data and algorithms.
This move has been a long time coming:
- Xi Jinping has been calling out “egregious abuses of dominant market positions” by internet industry players since at least 2016.
To drive the point home, regulators also called 27 tech firms to the table for a serious “come to Xisus” meeting.
The big takeaway (CAC):
- “The platform economy does not exist outside antitrust laws, nor should it be a breeding ground for unfair competition.”
Regulators also took a rare position on ethical issues in data collection:
- Interconnections between big data and artificial intelligence have the potential to turn consumers into “algorithmic prisoners.”
Get smart: The message regulators are sending goes beyond anti-monopoly issues. They want online business practices to reflect sound and legal offline business practices.
Get smarter: Beijing’s concerns are economic, but also political. Big tech wields big power in two areas the Party prefers to monopolize – data and communication.
2. A new (scitech) revolution
On Tuesday, a special technology-focused Boao Forum for Asia kicked off with a written statement from Xi Jinping and a speech from Executive Vice Premier Han Zheng.
- This year’s forum, held in Macau, has been rescheduled, relocated, and reimagined due to COVID-19 restrictions.
Xi had a vague but inspiring message (CCTV):
- “A new scientific and technological revolution is upon us…providing a new path for addressing global development challenges.”
He made it clear China wants to collaborate on technology for development:
- “China is willing to work with other countries to…promote more open, inclusive, and mutually beneficial international scientific and technological innovation exchanges.”
Han’s remarks were more focused on homegrown innovation (Xinhua):
- “[He] urged…improvements to the national innovation system…[to] build China into a leading nation in science and technology.”
Han also called for more cooperation, including:
- “Joint efforts to…push for more open, inclusive, and mutually beneficial international exchanges on science, technology, and innovation.”
Get smart: Top leaders are obsessed with scitech and innovation policy. These remarks – and organizers’ decision to reframe Boao with an innovation focus – reflect this priority.
3. Won’t you be my neighbor?
On Tuesday, Xi Jinping attened the Shanghai Cooperation Organization (SCO) summit via videolink.
Some context: The SCO’s membership includes China, Russia, India, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.
More context: The organization mainly focuses on regional security issues including (surprise, surprise) combatting “the three evils” of terrorism, separatism, and extremism.
Xi offered some inspiring words (Xinhua 1):
- “Humanity lives in a global village where the interests and destinies of all countries are intertwined.”
- “Xi said the trend toward peace, development, cooperation and mutual benefit is unstoppable.”
- “Good neighborliness and friendship will prevail over a beggar-thy-neighbor approach…and multilateralism will win over unilateralism.”
According to Xi, good neighbors always mind their own business (Xinhua 2):
- “Xi…voiced firm opposition to interference by external forces in the domestic affairs of the member states of the [SCO] under any pretext.”
- “Xi stressed the need to firmly support relevant countries in…safeguarding political security and social stability.”
Get smart: Xi wants to promote China’s absolutist view of national sovereignty in multilateral forums, especially in the context of its heavy-handed counterterrorism efforts in Xinjiang.
Get smarter: Most of the SCO countries are on the same page.
4. NPC disqualifies Hong Kong lawmakers
China’s legislature (NPCSC) concluded its specially scheduled two-day session on Tuesday.
Some context: The NPCSC usually meets every two months. They last met in mid-October (see October 14 Tip Sheet), and were not scheduled to meet again until December. But with an ambitious legislative to-do list this year, legislators decided to hold an extra session.
So what did they get up to?
- The Veterans Support Law
- A resolution to amend the Copyright Law
But here’s the big news (Xinhua):
- “Chinese lawmakers on Wednesday voted to adopt a decision on the qualification of members of the Legislative Council (LegCo) of the Hong Kong Special Administrative Region (HKSAR).”
- “[The resolution] stipulated that [Hong Kong] lawmakers would immediately lose their seats if they were ruled to have promoted or supported the notion of Hong Kong independence, refused to endorse the country’s resumption of sovereignty over the city, sought foreign forces to meddle in the city’s affairs or engaged in acts that jeopardise national security.”
The effects have been immediate: Four Hong Kong opposition lawmakers were disqualified on Wednesday.
Get smart: This is a further nail in the coffin for Hong Kong autonomy.
5. Li continues business environment improvement campaign
On Tuesday, the State Council published a hefty task list for reforming government to improve the business environment.
Some context: The document is a follow-up to Premier Li Keqiang’s September meeting on the same topic (see September 14 Tip Sheet).
It’s along to-do list: The document contains over 70 tasks assigned to specific ministries.
Some of the measures are of particular interest to businesses, including (Gov.cn):
- A big data driven tax and fee cut alert, to let qualified companies know when they are eligible for a certain cut
- A list that contains all the administrative approvals held by the central government, including details on each approval’s procedural specifics
- A mechanism to review the setting of new approvals by next June
- A new batch of approvals to be dissolved or delegated by next June
- A guideline to regulate the government’s discretionary power in administrative law enforcement by 2021
- A promise to clean up existing rules that violate the new Foreign Investment Law, which took effect earlier this year
- A reward and penalty mechanism for the government’s efforts to improve the business environment – in which companies will get a say in evaluating different government agencies’ performance
Get smart: Li Keqiang has been gradually chipping away at the administrative state since he came to office in 2013. He’s achieved results, but his work is far from finished.
6. China not worried about winter COVID-19 resurgence
Between Sunday and Wednesday, domestically transmitted COVID-19 cases have been discovered in some cities (NHC):
- Tianjin reported two confirmed cases and one asymptomatic case
- Shanghai reported one confirmed case
- Fuyang, Anhui reported one confirmed case connected to the Shanghai case
While quickly isolating and investigating the cases, authorities urged people not to overreact.
On Tuesday, chief virologist at the Chinese Center for Disease Control and Prevention (China CDC) Wu Zunyou pointed out that (The Paper):
- Recent local outbreaks have been discovered earlier and earlier.
- The outbreaks have, consequently, been smaller and smaller in scale.
The same day, revered infectious disease doctor Zhang Wenhong advised that (Yicai):
- The occasional infections should not impact people’s normal life and daily activities.
Their sentiments are perhaps best summed up by China CDC Deputy Director Feng Zijian (Caixin Global):
- “China ‘will very likely prevent’ a new spate of coronavirus infections this winter if it continues its current policies.”
Get smart: COVID-19 containment is key to continued economic recovery.