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China Tells Wall Street Crackdowns Aren’t A Rejection Of Private Enterprise

A top Beijing official has reportedly told US market chiefs that regulatory probes of China’s tech, property, education and gaming sectors are about tackling wealth inequality and not anti-capitalist

China's crackdowns have wiped billions of dollars in market value off some of the country's best-known private firms. Photo: Reuters

 

China has moved to reassure Wall Street that its ongoing regulatory assault on some of the country’s leading private enterprises is not a rejection of the US or international financial markets.

A top Beijing official reportedly told American market chiefs that the sweeping crackdowns of recent months were not an effort to ‘decouple’ but instead are aimed at promoting the party’s aim of ‘common prosperity’ and easing wealth inequality.

China Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai said: ”I don’t think you can find a government anywhere in the world that is as positive and as focused on technology as China.”

 

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Fang reportedly added that Beijing was expected to approve a record number of initial public offerings this year and a majority of companies going public in China would be private companies.

China’s unprecedented regulatory crackdown, which has wiped billions of dollars in market value off some of the country’s best-known private firms, has weighed on foreign investor sentiment.

Bloomberg News reported on Saturday that the CSRC defended its crackdown on various industries during the roundtable meeting with Wall Street executives.    

China had accelerated the pace of opening up its multi-trillion dollar financial sector to US firms in recent years, after years of lobbying by Wall Street for better access, even as Sino-US tensions rose on issues from trade to geopolitics.

 

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However, Beijing’s sweeping new policy moves – including crackdowns on internet companies, for-profit education, online gaming and property market excesses, and its ‘common prosperity’ wealth-sharing drive to ease inequality – have rattled some foreign investors.  

China’s Vice Premier Liu He told a forum early this month that the government’s policies and guidelines would continue to support the private sector.

Sources say the meeting was held virtually and attended by around 35 people including leaders of top Wall Street firms.

 

  • Reuters and Sean O’Meara

 

Read more:

The Hit List: How China’s Crackdowns Have Cost Its Firms Billions

Tech Shares Dip With China Crackdown Set To Target EV Firms Next

Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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