In the aftermath of big moves by Chinese officials on cryptocurrency and technology, analysts are reading the tea leaves, looking at what aspects of this governance may have been geopolitical, and how China’s actions are going to affect markets.
Today in a chronicling of China’s recent activity and possible motivations, Daniel van Boom at CNet talks about a “Common Prosperity” plan by the Xinping administration that aims to close China’s wealth equality gap.
The nation plans to do this, in part, van Boom says, by reining in “celebrity culture,” looking critically at corporate practices, and putting a bull’s-eye on the back of big tech, all of which, he suggests, “offers lessons about what and what not to do.”
By contrast, he suggests, the United States seems unable to take similar aggressive measures at least on a competitive timeline.
“President Joe Biden wants the country’s richest to help fund his expensive infrastructure plan,” van Boom writes. “Corporations, particularly tech giants, are common targets because they pay little in tax despite making stratospheric profits. Yet Washington has been careful about reining in its tech titans, unsure how to regulate industries that move much more quickly than the law.”
In the past year, China has put the kibosh on cryptocurrency in some important ways, including a ban on mining, where previously, the majority of all Bitcoin mining had been done inside the country. We reported on miner moves to places like Kazakhstan and areas of Russia like Irkutsk, although miners are also moving activity into the United States.
In 2020, China also blocked the Ant Group’s IPO, amid controversy between serial entrepreneur Jack Ma and government agencies.
Van Boom also relates the appetite of the Chinese government for warning messages on some tech platforms, like telling users to go to sleep, or that they have “work tomorrow.”
All of this showcases the vast cultural differences between two world superpowers that both have to grapple with big tech platforms in their own ways. At the same time, Facebook continues to wrestle with serious problems including those revealed by a whistleblower in past weeks.
“Facebook has to do the ‘fundamental work’ and address the problems that have plagued its social service,” writes Katie Canales at Business Insider, citing input from
Anne Olderog, a senior partner at Vivaldi. “If not, those same problems could seep into the metaverse.”
Look for the impact on markets!
