The Chinese government announced on Friday that the three-year process of ‘rectification‘ Alibaba Group’s monopolistic practices was over. Experts said the announcement signalled a more supportive stance by the government towards the private sector in the hope of reviving sluggish economic growth.
The State Administration for Market Regulation said in a statement on Friday afternoon that fair competition had been restored following the Alibaba regulation, adding that the regulator would provide “sound protection” to enhance international competitiveness and help the company become a “world-class enterprise”.
In 2021, Beijing slapped Alibaba with a record antitrust fine of 18 billion yuan ($2.5 billion at current exchange rates) after an investigation found that the e-commerce giant had abused its dominant market position for several years. The market regulator also demanded that Alibaba reduce its anti-competitive behaviour and submit compliance reports for three years.
The extensive regulatory process, which began in late 2020 and lasted around 18 months, led to a major share sell-off in March 2022. Although Beijing has attempted to reverse course to some extent by repeatedly stressing its support for the private sector, the authorities’ statements have at times been perceived as ‘pressure’ on the industry.
Since the penalty was announced, Alibaba’s shares have fallen by around 65 per cent.
For Alibaba, this is a new starting point for development,’ Alibaba said in a statement. ‘Going forward, we will continue to innovate, adhere to compliance, increase investment in technology, promote the healthy development of the platform economy, and create more value for society,’ it said.
To prevent capital flight fuelled by the property slump, weak consumer spending and geopolitical tensions, Beijing continues to develop various policies to stimulate the private sector.
