Jack Ma, the founder of the Alibaba Group, at the opening ceremony of the Third Summit for Young Entrepreneurs Across China on September 25, 2020, in Fuzhou, Fujian Province, China.
Lyu Ming | China News Service | Getty Images
China announced new antitrust rules over the weekend – but this is unlikely to have too much of an impact on the market at the moment, according to a market watcher.
“The new regulation is still, you know, a little bit more detailed,” Hao Hong, chief executive and chief research officer at Bank of Communications International, told CNBC’s “Street Signs Asia.”
China’s State Administration for Market Regulation (MRSA) has tightened restrictions on Chinese internet giants such as Alibaba and Meituan, and introduced new guidelines on Sunday to reduce monopolistic behavior. The new rules formalize a project that was launched a few months earlier.
However, the development appears to have little impact on China’s internet giant stocks, most of which are still in positive territory until Monday afternoon in Hong Kong: Tencent rose 0.82%, Meituan rose 1.54 % and JD.com gained 1.14%. Alibaba alone decreased the trend, decreasing by about 0.16%.
Monday’s market movements were in stark contrast to the volatility seen in November, when shares in Hong Kong of Chinese technology giants fell after the regulator’s initial announcement. Billions of dollars in market value were wiped out after antitrust guidelines were first proposed.
Hong said the market needs time to digest the details of the latest antitrust guidelines, adding that China’s internet giants have been operating for years and already have “very strong” market positions.
“The regulation, you know, starts with a very good intention,” Hong said. “The fact is that … the market position … of these big internet platforms is very difficult to invade yet.”
While Hong acknowledged that the new rules will “make it easier for younger boys to grow up”, he also added that many of the big internet players, such as Alibaba and Tencent, have put their money into many startups. of Internet . “
Some notable examples of such investments include Alibaba’s participation in financial technology giant Ant Group and Tencent’s support for short film company Kuaishou, which saw strong investor interest on Friday during its $ 5 billion public listing in Hong Kong. .
The increased scrutiny in Beijing comes at a time when the technology industry is coming into the spotlight worldwide, with similar movements in the US as well as in the European Union.
– CNBC’s Evelyn Cheng contributed to this report.