Regulation on China’s technology sector is not loosening, it’s just becoming more “rational,” a top executive at e-commerce firm JD.com told CNBC.
Over the past 16 months, Beijing has enacted sweeping regulation on the internet industry, a move that has contributed to billions of dollars of value being wiped off from China’s internet sector.
But a resurgence of Covid in China, accompanied by lockdowns in major parts of the country, has hurt economic growth. The government is looking for ways to boost the economy, and there are signs the crackdown on technology companies may be easing.
Xin Lijun, CEO of JD Retail, told CNBC in an interview aired on Friday, that regulation is not necessarily easing, but it is becoming more stable.
“In fact, each country follows the same path when developing a certain areas, China and U.S. included, which is to encourage innovation and provide loose environment at the early stages, and then conduct moderate regulation when the sector develops to a certain level,” Xin said.
“The Chinese tech sector or internet sector is going through this process. Thus I wouldn’t say regulation [is] loosening. I’d say regulation [it] is conducted in a more rational way.”
China’s tech crackdown came in thick and fast in areas from antitrust to data protection and seemed to have taken investors off guard with the speed in which it was enacted. But more recently, regulatory action appears to be less intense.
“The current regulation is gradually going onto a normal track. It’s normal that there might be some unexpected negative impacts when trying to impose regulation on a new sector. But as the regulation becomes more stable, the overall development [of the internet sector] and the market will be more stable.”
JD.com has largely escaped major regulatory action — unlike its rival Alibaba which was hit by a $2.8 billion antitrust fine last year.