The Chinese tech giants have made a mistake: they have practiced or tolerated for too long and much to the scorn of that country's government and public opinion, online fraud, data theft and collection of sensitive information to the detriment of millions of people. But above all they have grown too much, ending up overshadowing and becoming too independent from that leadership of the party that had launched them in their success.
The new privacy law, which is expected to be approved by China's main legislative body this week, far exceeds the world's strictest law for protecting privacy. online privacy, the General Data Protection Regulation in Europe. But "unlike European governments, which in turn face increased public pressure on data collection, Beijing is expected to maintain broad access to data under the new Personal Information Protection Act"1. In short, the data of the Chinese will be inaccessible to everyone, while Xi Jinping and his gang will find no obstacles in knowing everything about everyone in their empire..
Beyond a simple expedient to allow even more the "big brother" of Beijing to put his nose even more into the life of his subjects, it is a real paradigm shift for Communist China, which had seen hundreds of billionaire mandarins growing in the shadow of the party: blocking Alibaba's multibillion-dollar IPO last November, to the point of making the world fear for the physical safety of its founder Jack Ma, was only the first move.
On August 11, a report by the Communist Party announced that the government will draft new laws on national security, technological innovation, monopolies and education, as well as in areas involving foreigners. As if that were not enough, the Communist leaders have decreed that, in order to prevent and resolve social conflicts, officials will have a free hand to "nip conflicts in the bud", since "the rule of law must follow the party leader "2.
Experts and companies warn that the turbulence shows no signs of easing as the Chinese government launches a new legal framework for how companies collect and use data "3. "For Chinese technology companies, the era of free data collection and use in China - 'freely' - without consent, 'without accountability' - without accountability and 'for free' is over."says Winston Ma, former North American head of the Chinese sovereign wealth fund "Companies like Alibaba, Tencent and ByteDance will have to rethink their business models".
The story is also changing for foreign investors, as, according to last week's party note to which we have already referred, "new laws on national security, technological innovation, monopolies and education, as well as in the areas that involving foreigners ”will put everything under Beijing's control. But it's safe to bet that Italian investors in the People's Republic will be the last to notice ...
Why is Communist China doing all this? According to Mark Mobius, a business expert in the Asian giant, "Their goal is to become bigger than the United States". In pursuing global geopolitical interests, in Beijing they have no problems with internal public opinion: they believe, in fact, that, as claimed by the CEO of Baidu, the Chinese Google, that the citizens of the People's Republic in many situations are willing to "trade privacy for convenience, security or efficiency". Happy with them ...
Certainly, neither in Europe nor in the United States can we ignore the problem, also because the power struggles and above all the reorganizations of multinationals high-tech Chinese people could impact on private savings and, ultimately, on our lifestyle.
In recent months, Chinese multinationals listed in New York, London, Frankfurt or Milan have burned trillions: since November, Alibaba almost 370 billion dollars (equal to 44% of capitalization), NIO and its made-in-China electric cars almost 40%, Tencent almost three quarters of the value in just five months, New Oriental and TAP even 90 and 95% of their capitalization between February and August. Take note that it is NOT money lost directly by companies, which in the last few months have presented balance sheets in order and announced record earnings, but by investors, private and institutional, who in recent years had put their savings and their capital in companies considered solid.. And that such they are: these companies were targeted by the leadership of the People's Republic and as such they immediately became high-risk investments for foreigners.
Not that overseas listing is welcome in Communist China: “In early July, the Chinese government said it would increase oversight of all Chinese offshore companies and tighten the rules for cross-border data flows. This change should affect not only companies already listed in double stakes, but also those that plan to debut in the United States in the coming months "4. It is no coincidence that the hedge funds they are given on the run from the titles of the Dragon.
The suspicion, undeclared but real, is that after the coronavirus, Beijing is also about to make us pay the bill of its companies in collision with the central power and of its desire for control over large companies.
The impact of Xi Jinping's new policies on the western economy (and on Italy in particular) promises to be strong also towards the premium companies that sell in the Middle Kingdom: a few days ago the announcement of a "reasonable adjustment of the excessive incomes "and encouragement to wealthy groups and businesses" to give more to society "5 which have been interpreted by experts as cuts on luxury spending. It is no coincidence that the shares of Moncler, LVMH and Hermes have collapsed by almost a tenth in the last 72 hours: the luxury expenses of things are made up almost exclusively by the import of Italian, French, etc. products. For the uninitiated, China is worth two billion a month for our most important companies and for small businesses with high added value.
In short, it seems that after the pandemic, China is preparing another bitter surprise for us ...
Photo: Xinhua / web