- Inside China’s big tech innovation push
- China is cracking down on data to overseas firms
- Chinese data is becoming less available
Dear Reader,
Another broad headwind for Chinese activity is the crackdown on foreign companies, as well as a push for state-owned enterprises (SOEs) playing a bigger role in China’s tech innovation push.
By pushing more for SOEs, it will likely crowd out the upstarts, especially because money/ government support will flow to the government assets vs private sector.
Beijing wants state-owned enterprises (SOEs) to play a bigger role in the country’s tech innovation push.
- That’s the message from a recent meeting between the Ministry of Science and Technology (MoST) and the SOE administrator (SASAC).
Some context: After its massive reorganization in March, MoST is spearheading the country’s tech innovation push.
- That means MoST gets to decide where state resources will be distributed.
Wang Zhigang, head of MoST, gave SOE innovation his full endorsement (MoST):
- “Central government SOE are an important strategic force for sci-tech innovation.”
- “[We] should support them to…win the battle for key core technology.”
Zhang Yuzhuo, head of SASAC, didn’t shy away from asking for help.
He asked MoST to support SOEs to:
- Set up national scientific labs
- Build state-owned tech champions
- Participate in major basic research projects
Get smart: Zhang and SASAC are likely to get what they ask for.
That’s because Xi Jinping has signaled that he wants SOEs to lead the charge in developing core technologies.
Get smarter: This is a suboptimal innovation policy, to say the least.
- Showering resources in the state sector will crowd out the much more innovative private sector.
China is Cracking Down on Data Access to Overseas Firms
“China’s crackdown on data access to overseas firms is adding to concerns about how Beijing controls the flow of information in the country, making it difficult for investors to assess the state of the economy.”
In recent weeks, domestic data company Wind Information Co. has stopped providing some information to overseas clients, US consultancy Bain & Co. was targeted by investigators and business intelligence firm Capvision raided as part of a new anti-spy campaign.
The lack of access to information goes much deeper than that, though.
For at least a year or more, data providers — some official and others private — have been restricting information like academic papers and court judgments, official biographies of politicians, and bond market transactions.
“At the end of the day it’s becoming harder to analyze what’s going on in China,” Hao Hong, chief economist at Grow Investment Group, said in an interview on Bloomberg Television on Monday.
Chinese Data Is Becoming Less Available
As Chinese data gradually becomes less available, “people learn to get around the issue” by using different data sources, he said.
Corporate Data
Wind in recent months stopped giving offshore clients access to its corporate registry database, according to multiple people familiar with the matter, citing regulatory requirements.
Registry databases at Qichacha and TianYanCha — companies that provide similar services — have also been inaccessible for some time to users outside mainland China.
There’s been no official confirmation or explanation for the data restrictions…
However, the Wall Street Journal reported that Beijing wanted to curtail the information in part because of a series of reports written by US research institutions that alarmed officials.
There has been a growing crackdown on international/ foreign assets, which is creating a much bigger issue for further investment in China.
We have been discussing the government crackdowns for years now, and Xi has been talking more on “anti-corruption” and other means of increasing internal controls.
I agree with some parts of the below, but I do believe this is a broader target on international/foreign companies.
There is clearly a connection to information leaks, but this has been growing for over a decade – with a big push over the last 5.
Thanks for reading,
Freedom Financial News
