China at war with spiritual opium!
China has declared war. Against its own technology companies. Since last February, the capitalisations of jewels such as Tencent, Alibaba, Kuaishou Technology and Meituan have lost billions of dollars. The stock index Hang Seng Tech that figures the biggest technology companies in the country has collapsed by 45%. The big business leaders have been AWOL for weeks, months even. Like Jack Ma, founder of the e-commerce giant Alibaba, who was summoned to a meeting with members of the government and whose then very prolonged absence led to the conclusion that he had been sentenced to forced labour, but who in the end got away with a fine amounting to some tens of billions. Ma, whose empire has literally collapsed, is of course though not the sole target of this cleansing that is also coming down hard on the big Chinese fintech companies, including the likes of Didi, China’s Uber, and ByteDance, the conglomerate that owns TikTok.
Officially, these recovery, or “rectification”, operations, such is the term that is being used in such high regard, aim to whip the internet back into line, that is to say a line that favours “durable and healthy development” of the Chinese economy. It is of course possible to make a connection between these ambitious and spectacular measures by the Chinese authorities and the anti-trust campaigns led in the US and to a lesser extent in Europe. It would indeed be a legitimate move to rein in the ever more political power of the Big Tech companies, and the leaders of China would of course do very well to prevent the emergence of these alternative power centres. However, while the US government has indeed led many head-on battles over the decades against for example Standard Oil, Microsoft, and AT&T, it has – obviously – never sought to destroy the industries and the sectors in which these companies under pursuit were active. No major, large-scale, or widespread action has ever been attempted, no more in the US than in Europe, against all the internet companies at once, as is now the case in China where the whole of this gigantic sector is being whipped back into line, or even dismantled altogether. We cannot highlight enough this fundamental difference between the well-targeted approaches taken by justice and by the American and European regulators, and the current extreme attacks by China we are seeing that are not on its most powerful internet companies but on the sector as a whole!
To a certain extent, China’s position matches the one – that has minority backing in the US – that states that Facebook and Google (like Alibaba and Tencent in China) create no added value, that these companies live off their annuities, and that they no longer produce anything greater relative to their profits. In truth, the Chinese technology sector’s journey down the path of globalisation signals the advent of a national policy in China geared towards priorities that are otherwise more important to the nation than social media, gaming, consumption, and leisure. Its strategy of rapid growth over the 1990s and 2000s, that was based on vital technological and human resources being monopolised by a sector that was all but dedicated to needs considered to be futile, has survived. Chinese leadership has now gone past the stage where it was focussed on maintaining then stabilising economic growth. And the Chinese youth are now being commanded to concentrate their skills and energy on the nation’s only worthy objective: power. With the internet being an absolutely vital domain in China’s rise to absolute power, it is out the question to diminish the resources – whatever they might be – in domains linked to leisure and personal comfort, since doing so would disrupt the Chinese people’s attention and concentration, which would in turn compromise their effort levels.
China has thus set in motion a great Cultural Revolution 2.0, motivated this time (fundamentally different from the revolution of 1966-1976) by the existential threat – as it is perceived by the authorities – emanating from the US. However, this crackdown that the Communist Party is forging on ahead with is having trouble masking the fragility of a system likely to implode if it fails, with the leaders of China knowing that their country doesn’t benefit from the existence of resilient US institutions.