Jack Ma, founder of Alibaba Group, at the opening ceremony of the 3rd All-China Young Entrepreneurs Gathering on September 25, 2020 in Fuzhou, Fujian Province in China.
Lyu Ming | China News Service Getty Images
China announced new anti-monopoly rules over the weekend – but it is unlikely to have much of an impact on the market for now, according to one market observer.
“The new regulation remains, you know, a little unclear in detail,” Hao Hong, managing director and head of research at Bank of Communications International, told CNBC’s “Street Signs Asia” on Monday.
China’s State Administration for Market Regulation (SAMR) has cracked down on Chinese internet giants such as Alibaba and Meituan, and introduced new guidelines Sunday to curb monopolistic behavior. The new rules formalize a draft released months earlier.
Stocks of Chinese internet giants in Hong Kong mixed with the market on Monday near the city: Tencent rose 0.48% while Meituan jumped 1.25%. JD.com declined 0.6% and Alibaba lost 0.62%.
However, Monday’s market movements were quite different from the volatility seen in November, when shares of China’s tech giants fell listed after the regulator’s first announcement. Billions of dollars in market value were written off after the anti-trust directive was first proposed.
Hong said the market needs time to digest the latest anti-monopoly guidance, adding that China’s internet giants have been at work for years and that market positions are “very tough” they already have.
“The management, you know, starts with a really good intention,” Hong said. “The fact is that … the market situation … of these big internet platforms is very hard to get in for now.”
While acknowledging that the new rules will “make it easier for the smaller boys to grow,” Hong added that many of the big internet players, such as Alibaba and Tencent, have also made their own money. contributed to many of the startup campaigns on the internet. . “
Some notable examples of such investments include Alibaba’s involvement in financial technology giant Ant Group and Tencent’s support with short video company Kuaishou, which saw strong investor interest Friday during listing its $ 5 billion public service in Hong Kong.
The larger study by Beijing comes at a time when the tech industry is coming under worldwide scrutiny, with similar trends in the US as well as the European Union.
– Evelyn Cheng from CNBC contributed to this report.