Beijing boosts tech scrutiny but repeat of 2021 crackdown is unlikely

Beijing has stepped up corporate regulatory sanctions this year, but analysts say a repeat of the 2021 crackdown that wiped out more than $1 trillion from Chinese tech stocks is unlikely.

Authorities have been on a mission since January official antitrust investigation has become the country’s largest online travel agency trip.com and summoned a dozen tech giants, including Alibaba, Tencent, ByteDance’s Douyin, Baidu. JD.com and Meituan – over Aggressive price competition And promotional claims Before the shopping festival in June. They also sent a stern warning to Walmart China earlier this month over repeated food safety failures at wholesale retailer Sam’s Club.

“The intensification of actions and the number of companies involved inevitably brings back memories of the regulatory crackdown on internet platform companies from more than five years ago,” said Neo Wang, Evercore’s chief China strategist.

Beijing over a two-year period from late 2020 launched a massive crackdown It has targeted its most powerful companies, blocking the world’s biggest stock market debut of Alibaba’s fintech Ant Group, forcing ride-hailing giant Didi Global out of the US and intensifying surveillance across sectors from after-school tutors to highly leveraged real estate developers.

“The state was reasserting extreme financialization as well as political control over data, capital expansion, tutoring ideology, overseas listings and platform power,” said Paul Triolo, China partner and technology policy leader at DGA-Albright Stonebridge Group, a global consultancy.

But Triolo said the game has changed as policymakers are now more cautious about weak domestic demand, a stagnant job market and an economy where private technology companies are more willing to increase investments in computing infrastructure that support the country’s artificial intelligence goals. Beijing is trying to act, but “before it triggers another broad investor panic,” he said.

Han Shen Lin, China country director of The Asia Group, expressed the issue more clearly and said, “Beijing needs the confidence of the private sector, employment and technology investment much more than in 2021.”

Beijing has moved to support the private sector after years of regulatory restrictions; A rare closed-door symposium was held in February 2025, where Chinese President Xi Jinping told the country’s top entrepreneurs, including Alibaba’s Jack Ma, to “showcase their talents” in a new era for the country’s private economy.

China has now made a policy priority of the so-called anti-revolutionary campaign aimed at combating price wars and interindustry overcapacity that are fueling devastating deflation.

In January, Beijing launched an antitrust investigation. trip.com alleging “abuse of market dominance” by forcing traders to make special deals before increasing commission fees. The move caused the company’s Hong Kong shares to fall almost 20% in one day. Citibank analysts estimate that the ongoing antitrust investigation could lead to fines of up to 4.9 billion yuan ($723 million).

In May, Chinese market regulators also strongest food safety penaltiesfined various e-commerce and food delivery platforms a total of 3.6 billion yuan for hosting unverified sellers competing on price.

Ahead of the “618” shopping festival, Beijing’s municipal regulator has called out online retailers, including Xiaohongshu. reportedly We are ready to confidentially apply for IPO in Hong Kong Misleading subsidy ads and a hidden fee mechanism that transfers costs to sellers.

SAMR was called in the same week Senior management of Walmart China Membership has called for an overhaul of supply chain controls, prompting a formal accountability meeting over repeated food safety failures at warehouse chain Sam’s Club. Sam’s Club established a corrections task force Overhauling supply chain controls and replaced its president with Liu PengHe is a former executive of Alibaba.

Still, Rhodium Group research analyst Ciel Qi said the moves amount to “a calibrated signal rather than a sustained pressure.”

Another reason for Beijing’s restriction: Intensifying competition with the USA to develop artificial intelligence

Triolo said Beijing is keen to avoid undermining the competitiveness of its leading companies as Washington continues to put pressure on Chinese platforms to improve their AI infrastructure and threats of further restrictions emerge.

“Regulators are much more constrained than in 2021,” he said. “These companies need to invest in AI infrastructure, cloud, logistics and consumer services.”