China Crackdowns Multiply as Xi Pushes for ‘Common Prosperity’
(Bloomberg) -- China’s regulatory onslaught shows no signs of slowing as President Xi Jinping tries to remake the world’s second-largest economy.
Xi’s “common prosperity” campaign kicked into overdrive this week, following an Aug. 17 meeting of top economic policy makers that outlined new strategies to tackle China’s yawning wealth gap. The flurry of activity included a regulatory vow to step up tax enforcement, a top court ruling against labor abuses in the private sector and a government denouncement of excesses in “fan culture.”
The Communist Party has signaled it will rely on a mix of policy, market forces and private philanthropy to create a more olive-shaped income distribution, fat in the middle and tapered on the ends. Policy makers are also asserting greater control over data-rich tech companies and pushing the nation’s youth to fall in line with party priorities.
It’s too early to gauge whether the campaigns will be successful, but the short-term effects are likely to include slower economic growth and more volatile financial markets. A measure of price swings in the country’s shares soared this week to the highest level in 16 months.
Here are the some of latest developments:
- Chinese Authorities Investigating Tax Evasion Among High Earners First up: actress Zheng Shuang, who was ordered to pay 299 million yuan ($46 million) in overdue taxes, late fees and fines.
- China’s Top Court Spells Out How Excessive ‘996’ Work Culture Is Illegal The Supreme People’s Court denounced labor violations and unreasonable overtime, putting the country’s most demanding employers -- including some of its biggest tech companies -- on notice.
- China Plans Control of Tech Algorithms U.S. Can Only Dream Of The rules would forbid practices that “encourage addiction or high consumption.”
- Tencent Tells Kids to Wait Till 18 to Play This Dating Game It’s the gaming giant’s latest move to appease Beijing after state media decried video games as “spiritual opium” for Chinese youth.
- China Plans to Ban U.S. IPOs for Data-Heavy Tech Firms Dow Jones reports regulators are preparing new rules that would ban companies with large amounts of sensitive consumer data from going public in the U.S.
- PBOC Vows Financial Support to Promote Common Prosperity The country’s foreign exchange regulator also said it would make the campaign a priority.
- China Steps Up Crackdown on Online ‘Fan Community’ Platforms Regulators asked fan sites to remove celebrity rankings, clean up rumors and restrict minors from joining community activities. Entertainment stocks fell.
- Billionaire Donations Soar in Push for ‘Common Prosperity’ In the latest act of generosity, Pinduoduo pledged to earmark $1.5 billion in corporate profits to Chinese farmers.
- China Starts Probe Into Party Boss of Alibaba’s Home City Word of the investigation was followed by a Central Commission for Discipline Inspection statement that the city of Hangzhou would start a campaign to root out inappropriate government-business ties.
- Prominent Chinese Economists Say ‘Common Prosperity’ Won’t Rob the Rich It may not be all bad news for the country’s wealthy.
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