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Shuli Ren

Why Is China Regulating Big Tech Now?

The K-shaped recovery is proof of widening inequality. That doesn’t sit well with Beijing.

Mom-and-pop shops don’t stand a chance.

Mom-and-pop shops don’t stand a chance.

Photographer: Xaume Olleros/Bloomberg

Governments around the world put out consultation papers all the time. But only in China can one vaguely worded, 22-page document on antitrust regulations ignite a $290 billion equity selloff. As investors nurse their wounds, they want to know, why is China regulating Big Tech now? And what exactly does Beijing want? 

Emerging out of the Covid-19 recession, China got whacked by a K-shaped rebound. The economy is running at two speeds: Large technology companies are thriving, while storefront businesses continue to struggle. A year ago, e-commerce accounted for about 25% of total retail sales; now, it’s edging toward 30%. The pandemic has only exacerbated the discrepancy between online and offline. This widening inequality doesn’t sit well with Beijing.