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Xi Urges Regulation of ‘Unhealthy’ Parts of Digital Economy

President Xi Jinping said China’s digital economy has `unhealthy and irregular seeds’ that threaten national economic and financial security.

President Xi said the Beijing bourse would be the main one for innovation-oriented SMEs, but this has sparked fear of a 'turf war'. Photo: Screen grab via AFP.

President Xi Jinping has called for improved regulation and governance of China’s digital economy to guard against its “unhealthy” development as Beijing aims to boost the sector’s contribution to the country’s growth.

In an essay in the ruling Communist Party’s publication Qiushi on Saturday, Xi called for focusing on key areas including integrated circuits, displays, communications equipment and intelligent hardware.

China should “cultivate a number of enterprises with international competitiveness, and leading ecological firms with control over industrial chains, to create world-class digital industry clusters,” he said.



‘Disorderly Expansion’

Xi also called for regulation and standardisation to plug regulatory loopholes and prevent “monopolies and disorderly expansion of capital” in the world’s second-largest economy.

“In the course of rapid development, China’s digital economy has also displayed some unhealthy and irregular seeds and trends that not only affect the healthy development of the digital economy, but violate laws and regulations and pose a threat to national economic and financial security,” he said.

China should also improve its national security system, with a focus on strengthening digital economy early warning, prevention and control systems to ensure the security of key technologies, important industries and facilities, strategic resources, and leading enterprises.

Xi’s essay follows a plan issued by China’s cabinet on Wednesday for the development of the digital economy, which aims to increase the sector’s share of national GDP by pushing technologies like 6G and big data centers.

That plan also highlighted challenges including a lack of innovation capacity in key areas and weak governance.


  • By Reuters with additional editing by Kevin Hamlin


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Kevin Hamlin

Kevin Hamlin is a financial journalist with extensive experience covering Asia. Before joining Asia Financial, Kevin worked for Bloomberg News, spending 12 years as Senior China Economy Reporter in Beijing. Prior to that, he was Asia Bureau Chief of Institutional Investor for ten years.


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