Alibaba, Tencent, and other Big Tech firms in China are turning to former government regulators to help them maneuver around Beijing’s strengthening technology sector onslaught, the Financial Times reported.
Chinese President Xi Jinping intensified his crackdown on the sector and called on the country’s regulators to step up enforcement, particularly regarding tech platforms offering financial services. It’s uncommon for government officials in the country to leave their posts and move on to private industry jobs.
The world’s second-largest economy has seen intensifying scrutiny of technology platforms under Xi’s rule, which has prompted companies in China to recruit former bureaucrats to help them navigate the uncertain waters. Billionaire Jack Ma, Ant Group co-founder and the former head of its spinoff Alibaba, has been known to hire ex-government officials, per FT.
Ma dropped from public view after criticizing the state-owned bank in October 2020 and having his $37 billion initial public offering (IPO) for Ant Group pulled the following month.
Tencent, ByteDance and Meituan are just a few of the large tech firms in China that hired former regulators like antitrust regulators and court docket judges, according to public records seen by FT.
Cui Shufeng, a former deputy director of the commerce ministry’s anti-monopoly bureau, is the most well-known bureaucrat who went to the private sector. He has served as Alibaba’s head of policy research since 2019.
When Alibaba was hit with record fines totaling $2.8 billion, Cui told officials that tech companies should be treated differently than other sectors.
Earlier this month, technology companies in China were given one month to increase their efforts regarding competition law. The Chinese government handed down warnings to 34 tech platforms and required them to make a public pledge that they will adhere to China’s antitrust regulations.
After Chinese officials upped regulations, some 84 companies in the country withdrew their IPO applications in 2021. Just nine were pulled by companies last year.