Why China Keeps on Targeting Its Technology Giants: QuickTake

China’s hands-off approach to the technology sector minted billionaires and giant companies at a breathtaking pace. Now President Xi Jinping’s government is reining in the country’s most powerful corporations, including Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Didi Global Inc., along with their ultra-rich founders. The scrutiny is one of the largest concerted actions against private enterprise in decades, wiping out $1.5 trillion in market value last year -- and new blows keep coming.

Maintaining social stability is a signature goal of Xi and the ruling Chinese Communist Party, so any company or person it perceives as threatening can find themselves in the cross-hairs. Such a sweeping definition could include just about any large business. Alibaba has been targeted by antitrust authorities for alleged monopolistic conduct in e-commerce, while Meituan is being scrutinized for food delivery. Didi’s position as the biggest ride-hailer in China, and the massive amounts of data that generates, caught the attention of the Cyberspace Administration, China’s internet watchdog, while the Ministry of Education went after tutoring firms that profit from the intense competition to get into the country’s top universities. The speed of change has been dizzying: Rules issued in 2021 to curb monopolistic practices were drafted and finalized in just three months.