Chinese tech and tutoring companies have been hit hard over the past couple of weeks by regulators leading to the biggest shakeout in the last five years and forcing Chinese authorities to issue statements to calm market participants.
Citing long-term development of economy and society to defend their actions, the regulation aimed some of the biggest companies like Tencent, Alibaba and Meituan. Violations ranged from abusing market position, illegally obtaining user data and giving poor working conditions.
Could a similar crackdown affect US mega caps such as Amazon and Google? While there have been calls by politicians to tighten the screws on some of their practices and enforce antitrust laws, free market beliefs are more likely to prevail in this instance. Following the latest regulation, the SEC has temporarily halted IPOs of Chinese companies in the US. After all we wouldn’t want fairer business practices to get in the way of stockholder profits.