The technology sector in particular has come under scrutiny from Chinese authorities. IPOs had to be cancelled, companies were broken up, and booming crypto-mining companies were deprived of much of their basis. “While this sounds like a blow against the private sector by the Communist Party, the opposite is the case”, Gerlinger pointed out. China’s leadership is drastically rebuilding the country. Instead of serving as the world’s workbench, its national economy is set to become the global technological and economic leader. Electro-mobility is just one example that demonstrates how far ahead China is already in some areas compared to Western states.
“The steps adopted by the government now are not intended to damage the private sector”, Gerlinger highlighted. Rather, they are an adjustment to Western standards in terms of regulation. “For years, internet platforms and e-commerce were allowed to grow almost unregulated and unsupervised in China”, said Gerlinger. “This led to industry growth rates that were significantly higher than those in the US, for example.” Now loopholes are being closed that have also long been criticised by many Western nations.
Overall, however, competition within China is also becoming fairer in international comparison. “This is a development that will tend to have a positive effect in the long term”, Gerlinger explained. “And the Chinese leadership also wants to send a signal internally, of course, to show who is master in the house.” After all, the more freedoms citizens are getting and the more liberties companies are taking, the more the influence of the Communist Party is shrinking. “This is where the leadership wanted to counteract – and it succeeded in doing so”, said Gerlinger.
Many companies’ stock prices were falling, investors avoided the Chinese market. “A mistake”, according to Gerlinger. “In the long term, the region is important as a growth engine for the global economy; Chinese consumption alone is probably still decades away from peaking.”
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