China is looking to exert more influence over its tech giants

China has bought the golden shares of some of the country’s largest technology companies, including Alibaba Holding, in order to have more control over them. Beijing has also made a similar offer to buy shares in Tencent Holdings and other domestic tech giants, and plans to make changes to the country’s tech companies. Among other companies whose golden shares have been bought by China, we can mention Weibo, Kuaishou Technology, ByteDance, Tiktok, etc.

Golden shares mean that its holder will have the power of veto on the main decisions of the company, even if he does not have the majority of the shares. In the case of Alibaba Group, the Chinese government has acquired a minority stake of about one percent of this company, which comes with special management advantages. This country buys golden shares of technology giants through state funds or state-owned companies and then appoints its representative on the board of directors of these companies to be present and involved in all important decisions.

to report GizmochinaOver the past few months, Alibala Group has been the target of severe repression by the regulatory authorities. Apart from this company, several other Chinese tech giants including Didi Global Inc and Tencent have also faced the wrath of the government. Over two years of regulatory crackdown on these companies, they were hit with hefty fines that wiped out more than a trillion dollars of their market value.

China’s economic structure is experiencing a bad situation with the adoption of zero-covid policies in recent years. Restrictions and censorship on eSports alone have cut millions out of the country’s economy.

The revenue of Chinese games reached 44 billion dollars in 2022. Currently, there are 655 million mobile gamers in this country, which constitute 24 billion dollars of its game market share, and the government of this country does not want to be unaffected in this field and other internet businesses. Therefore, it seems that Beijing is now acquiring management rights in the big tech giants to reform and revive the sector.

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