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China Acquires Minority ‘Golden’ Stakes in Two Alibaba Units

Beijing has been taking ‘golden shares’ in private online media and content companies for years, as part of a campaign to strengthen control over online content

Alibaba's breakup plan has been cheered by investors in the US and now Hong Kong.
Alibaba's plan to split into six business units is seen as an 'important test' for Chinese tech groups and is likely to be welcomed by regulators, analysts say. File photo: Reuters.


Business registration records show that Chinese government entities have acquired minority stakes with special rights in two local units of tech giant Alibaba Group Holding.

The moves are part of a campaign by Beijing to strengthen control over online content.

Beijing has been taking ‘golden shares’ in private online media and content companies for more than five years, and in recent years expanding such arrangements to companies with vast troves of data.

The stakes taken over the last four months in the Alibaba units are the first ones to come to light for the e-commerce firm. Alibaba has been one of the most prominent targets of China’s two-year-long regulatory crackdown on tech giants.

These golden shares, typically equal to about 1% of a firm, are bought by government-backed funds or companies which gain board representation and/or veto rights for key business decisions.

Public business registration records showed that in September last year an investment vehicle of state-owned Zhejiang Media Group took a 1% stake in Alibaba’s Youku Film and Television unit, which is based in Shanghai.

Zhejiang Media Group has also appointed Jin Jun, the general manager of one of its subsidiaries, to the board of the Alibaba unit, the records showed.

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Tighter control over online content

Separate business registration records showed that in December WangTouSuiCheng (Beijing), an entity under the China Internet Investment Fund (CIIF) set up by the Cyberspace Administration of China (CAC), acquired a 1% stake in Alibaba unit Guangzhou Lujiao, whose main focus is “research and experimentation”.

The Financial Times, which first reported the WangTouSuiCheng investment on Friday, said the goal of the investment is for Beijing to tighten control over content at the e-commerce giant’s streaming video unit Youku and web browser UCWeb.

Alibaba didn’t respond to a request to comment.

The FT also reported, citing unidentified sources, that discussions was under way for the government to take golden shares in gaming giant Tencent Holdings which would involve a stake in one of the group’s main subsidiaries. Tencent declined to comment.

Other firms that have such golden share arrangements include Full Truck Alliance Co, as well as mainland subsidiaries of TikTok owner ByteDance, Kuaishou Technology and Weibo.

Having such golden shares can be helpful to firms when they try to secure licences to disseminate online news and to show online visual and audio programmes, sources have said.


  • Reuters with additional editing by Jim Pollard




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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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