BIG IDEA | ‘The State Council’s statement provides a guiding context to interpret current regulatory thrusts. The blueprint as an attempt by Chinese authorities to help investors understand the motives behind the regulatory push.’

“A five-year term to the crackdown at least gives definition to the time extent of the regulatory reset. However, it will be a long time for investors to fret about pending changes.”

Read ‘Implementation Outline for the Construction of a Government under the Rule of Law (2021-2025).’

‘China released a five-year blueprint calling for greater regulation of vast parts of the economy, providing a sweeping framework for the broader crackdown on key industries that has left investors reeling.’

• ‘The document, jointly issued late Wednesday by the State Council and the Communist Party’s Central Committee, said authorities would “actively” work on legislation in areas including national security, technology and monopolies.’
• Law enforcement will be strengthened in sectors ranging from food and drugs to big data and artificial intelligence, the document said.’

‘Investors have been dumping shares of sectors that receive criticism in state media, from digital gaming and e-cigarettes to property and baby formula.’

• ‘They have been seeking to make sense of a regulatory onslaught in recent weeks that has roiled markets, particularly after authorities banned profits in the $100 billion after-school tutoring sector.’
• ‘Over the past year Chinese authorities have launched anti-monopoly probes into some of the nation’s largest tech companies such as Alibaba Group Holding Ltd., while also mandating cybersecurity reviews for foreign listings -- a measure that has created problems for Didi Global Inc.’

‘ Some analysts welcomed the blueprint as an attempt by Chinese authorities to help investors understand the motives behind the regulatory push.’

• ‘ “The State Council’s statement provides a guiding context to interpret current regulatory thrusts,” said Michael Norris, an analyst with Shanghai-based consultancy AgencyChina.’
• ‘ “In our view, investor concerns are driven less by proposed regulations’ substance, and more by cadence and communication. We view this announcement as doing a better job telegraphing future regulatory hotspots.” ’

‘ “A five-year term to the crackdown at least gives definition to the time extent of the regulatory reset,” Gary Dugan, chief executive officer at the Global CIO Office.’

• ‘ “However, it will be a long time for investors to fret about pending changes.” ’

‘ “We can’t draw too much insight about enforcement and the potential shape of crackdowns from one document or another,” said Graham Webster, who leads the DigiChina project at the Stanford University Cyber Policy Center.’

• ‘ “Much depends on what bureaucrats and their higher-ups land on in terms of priorities month after month.” ’