In China, Regulations Empower the State to Steer Tech Innovation

A man in Beijing, China, uses his mobile phone to take a picture of a big screen showing Chinese Premier Li Keqiang delivering a speech at the opening session of the National People’s Congress (NPC) on March 5, 2021.

(STR/AFP via Getty Images)

New government guidelines for managing China’s internet platform industry show Beijing will increasingly guide the research, development and investment activities of domestic private tech firms to achieve national development goals while using regulations as enforcement tools. Even foreign tech firms in China will be highly incentivized to focus their activities on technologies central to the government’s economic plans. On Jan. 18, China’s economic policy planner, the National Development and Reform Commission — along with China’s market regulator, cyberspace agency, taxation authority, the central bank and four ministries — published the “Opinions on the Healthy and Sustainable Development of the Platform Economy” (Opinions). The Opinions succinctly laid out the Chinese Communist Party’s (CCP) plans to deepen supervision of the platform economy and encourage innovation in technologies critical to national development plans.…