SHANGHAI (Reuters) – China should encourage the “orderly development” of capital, including stronger governance and market supervision, to avoid its “savage growth”, the Communist Party’s official People’s Daily newspaper said in a commentary on Tuesday.
The commentary comes amid a broad push to rein in big corporations, particularly in the vast online “platform” economy, that has seen companies including Alibaba Group and Meituan fined for monopolistic behaviour.
“Preventing the disorderly expansion of capital does not mean doing without capital, but means orderly development of capital,” the newspaper said.
“The purpose is to guide and urge enterprises to obey the Party’s leadership, obey and serve overall economic and social development, encourage and support enterprises to play an active role in promoting scientific and technological progress, promote a market economy, facilitate people’s lives and play an active role in participating in international competition.”
Since late 2020, authorities have been advocating “the prevention of disorderly expansion of capital”, a policy that has brought a clampdown on tech giants and private education firms.
The People’s Daily said capital’s “profit-seeking nature” led to both value creation and “savage growth”.
“The key lies in whether the behaviour can be correctly and effectively guided,” it said.
The newspaper called for “traffic lights” for capital, including improving negative list management systems, strengthening industry and market supervision, and boosting regulation of monopolies and unfair competition.
It cited the country’s Central Economic Work Conference in December, which called for strengthening anti-monopoly efforts, improved protection of intellectual property and for giving full play to the “positive role” of capital, while controlling its negative role.
China will pick up the pace in “perfecting” legal rules against unfair competition among companies, an official of the top market watchdog said in late January.
(Reporting by Andrew Galbraith; Editing by Robert Birsel)
