Reining In The Titans
I believe that this is an interesting thought, given recent high-profile news about Didi and Ant Financial in China and Facebook, Google and Apple in the US.
My own view is that neither the Chinese nor the American authorities will wish by their own actions to undermine their champions, and to allow their foreign rivals to gain precedence over these Titans.
If they do intervene, which they most likely will, it will be notionally “to protect consumers and the stability of markets”.
Thanks to Aubrey Capital for their observation “about the similarity we see between Beijing’s actions over the last year and the anti-trust legislation that began to be introduced in the US at the end of the nineteenth century. It seems self-evident that whilst government regulation cannot be ignored it does not mean the end of corporate success for the best companies. The Morgans, Carnegies, van der Bilts, Rockefellers et al went on making huge profits for years after the Sherman Act in 1890. Some of them are still at it!”[ii]
I think it is probably important that the Titans are not allowed to consume emerging corporate competition, which is the point of anti-trust legislation, and thus in this era of huge disruption perhaps the Titans should be wary of the next generation.
In China the CCP needs consistently to maintain its relevance by constantly improving the quality of life of its citizens. To that end it has encouraged freedom of commercial activity, and unleashed energy, employment in better jobs, and profitability. They don’t want interference even from their favourite sons.
Don’t tell me that leaders of the western world are not just as ruthless when they consider their positions threatened.
Finally some charts, courtesy of Matthews Asia and CEIC, which show the continuing shift to private sector SMEs in China.[iii]