Fri, Sep 03, 2021 page10

• Beijing orders probes at Meituan, Didi

  TIGHTENING GRIP: The orders to rectify misconduct at the tech firms came despite warnings against excessive government intervention by an influential economist

  • Bloomberg
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  Chinese regulators have ordered ride-hailing services run by Didi Global Inc (滴滴), Meituan (美團) and Alibaba Group Holding Ltd (阿里巴巴) to rectify instances of misconduct by December, ramping up scrutiny over an industry that employs millions.

  Officials from the Chinese Ministry of Transport and other departments summoned executives from 11 companies — including Didi, Meituan and Alibaba’s ride-sharing and navigation unit Amap (高德) — and criticized them for disrupting fair competition and hurting the interests of drivers and passengers, a statement published yesterday said.

  Regulators highlighted breaches including recruiting unlicensed drivers and the need to strengthen user data protection, the statement said.

  

  A delivery driver for Meituan takes a break during his shift in Shanghai, China, on Monday.

  Photo: Bloomberg

  Some companies used “vicious” competition and undermined the safety and stability of the industry, it said.

  The 11 companies were required to carry out self-inspections, fix those issues and draft compliance plans before the end of the year, the statement said.

  Beijing is moving swiftly to ensure the country’s sharing-economy behemoths improve the welfare of the millions of low-wage workers they depend on to power growth.

  That stems from Chinese President Xi Jinping’s (習近平) “common prosperity” campaign to get the private sector to share the enormous wealth accumulated during a decade-long Internet boom.

  Scores of listed Chinese companies have name-checked Xi’s “common prosperity” drive in earnings reports, as the private sector seeks to align itself with the campaign to reduce wealth inequality.

  At least 73 companies, including Ping An Insurance (Group) Co (平安保險), Meituan and Bank of China Ltd (中國銀行), used the flagship slogan in statements to shareholders filed to the Hong Kong, Shanghai and Shenzhen stock exchanges in the two weeks ending Tuesday.

  While that accounted for less than 2 percent of the more than 4,000 filings surveyed by Bloomberg News, it featured some of the country’s most influential firms.

  Xi’s push to narrow the country’s wealth gap has sent shock waves through the economy, triggering market sell-offs and prompting a flood of charitable giving among the country’s billionaires.

  A meeting led by Xi on Monday explicitly called on officials to “urge companies to obey the leadership of the [Chinese Communist] Party,” as reforms are rolled out.

  However, an influential liberal Chinese economist has warned against excessive government intervention and the erosion of the market economy in the nation’s pursuit of “common prosperity” and more income equality.

  Targeting rich people and entrepreneurs would only hurt jobs, consumers, charitable giving and lead the nation back into poverty, Zhang Weiying (張維迎), an economics professor at Peking University, wrote in an article published by the Chinese Economists 50 Forum, a think tank that includes some of the nation’s most prominent economists.

  Market-oriented reforms since the late 1970s have made China a fairer and more equal society, said Zhang, a long-time vocal critic of “big government” whose early work has influenced China’s price system reforms.

  A free economy has given common people opportunities to climb out of poverty and become wealthy, he said.

  “If we strengthen our confidence in the market economy and continue to push forward market-oriented reforms, China will move toward common prosperity,” he said. “If we lose our faith in the market and introduce more and more government intervention, China will only go into common poverty.”

  Zhang said that it is crucial to preserve entrepreneurs’ motivation to create wealth, because without it “the government will have no money to transfer payments, and charity will become a source of water.”
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