context: A few eye-catching expressions were coined at the December Politburo meeting just concluded. Signs of strengthening anti-monopoly, especially in the tech industry, have become a trend at the policy level in recent months. With the state’s Marxist genes in mind, regulatory overhauling and market shake-up could be some of the political and economic ramifications.
In the runup to the agenda-setting Central Economic Work meeting, a Politburo meeting is held every mid-December to discuss overall directives for the coming year. Heading into 2021, Politburo is demanding four major tasks be carried out, namely
- grappling with supply-side reform while focusing on demand-side reforms
- comprehensively promoting reform and opening up
- strengthening national strategic scitech power
- enhancing the independent controllability of the industrial supply chain
- forming a strong domestic market and a solid foundation for agriculture
- strengthening anti-monopoly and preventing the disorderly expansion of capital
- promoting the steady and healthy development of the real estate market
- continuously improving the quality of the ecological environment
- systematic assessment for concluding building a comprehensively well-off society
- strengthening the Party’s overall leadership in economic work
Among the tasks, the call for ‘strengthening anti-monopoly and preventing the disorderly expansion of capital’ has caught wide attention.
Irregularities of competition especially among internet platforms have been an outstanding issue in recent years. Smaller players have been driven out of business by price wars. Unconstrained expansion of capital harms the interests of consumers and hinders the sustainable growth paradigm, argues Liu Xue 刘学 Peking University Guanghua School of Management professor. The focus is on the real estate industry and internet finance platforms, Liu believes.
A high-standard market system is necessary for cultivating a strong domestic market (as per the dual circulation paradigm), points out Liu Xiangdong 刘向东 China International Economic Exchange Center economic research deputy director-general. Capital must therefore submit to the control of risks and the overriding agenda of high-quality growth, Liu believes.