China’s hands-off approach to the technology sector has minted billionaires and giant companies at a breathtaking pace. Now President Xi Jinping’s government is reining in the country’s most powerful corporations, including Alibaba Group Holding Ltd., Tencent Holdings Ltd and Didi Global Inc., along with their ultra-rich founders. The scrutiny is shaping up as one of the largest concerted actions against private enterprise in decades and raising the prospect that the leeway enjoyed by entrepreneurs like Jack Ma, founder of both Alibaba and the sprawling Ant Group Co., might be coming to an end.
Maintaining social stability is one of the signature goals of Xi and the ruling Chinese Communist Party, so any company or person it perceives as threatening that can find themselves in the cross-hairs. Such a sweeping definition also means just about any large business could find itself the subject of a crackdown. Alibaba was targeted by antitrust authorities for its dominance and actions in e-commerce while Meituan is scrutinized for food delivery. Didi’s position as the biggest ride-hailer in China, and the massive amounts of data that generates, caught the attention of the Cyberspace Administration while the Ministry of Education went after after-school tutoring firms who profit from the intense competition to get into the country’s top universities.