China Is Tightening Its Grip on Big Tech

China’s tech regulation goals are often in direct contradiction to what the rest of the world is trying to do. “Nothing, or very little about what’s being done in China, is reining in the power of the greatest data processor of them all: the Chinese government,” says Jamie Susskind, a barrister specializing in data and tech at London law firm 11KBW. Within China, officials have focused their attention on regulating domestic tech companies to the point of submission. The broader techlash has already resulted in Alibaba cofounder and executive chair Jack Ma stepping back from public life and is rumored to be behind the decision of Zhang Yiming, ByteDance’s founder, to step down as CEO.

The dramatic fall of Ma is typical of China’s approach to regulation. “When we start being starry-eyed about the Chinese model of enforcement, we’ve lost track of the fact that regulation isn’t just supposed to rein in private companies,” Susskind says. “It’s also supposed to limit the power of the state.” In China, that’s rarely the case. The challenge, Webster adds, is in unpicking the areas in which China and the rest of the world share common goals—and areas in which China is pursuing goals that democracies would find abhorrent.

Take China’s draft rules on synthetic media as one example. Presented in January, the proposals call for limits to be placed on the spread of deepfake content—an issue that has blighted not just China but the entire world. Under the rules, anything “synthetic” cannot be promoted through algorithms. Apps that promote deepfake content could face criminal prosecution and fines of up to RMB100,000 ($15,000). However, China has been one of the main developers of deepfake technology, including homegrown app Zao, which became popular in 2019.

But China’s recent wave of eye-catching moves against big tech is also a sign of officials playing catch-up with the rest of the world. For years, the country has, like many others, let the tech sector run rampant as a key driver of economic growth. And, as a result, the sector was closely tied to the political elite. Alibaba’s Ma, for example, has been a member of the Chinese Communist Party since the 1980s. Such closeness has allowed certain tech founders to lobby officials for preferential treatment. “Chinese regulation used to be very lax,” says Zhang. “The recent enforcement is mostly restoring some balance between regulation and innovation.”

And, in some instances, Chinese policymakers are adapting ideas from the West. The EU’s General Data Protection Regulation not only inspired the California Consumer Privacy Act but also similar moves within China, including that country’s Personal Information Protection Law, which limits how much personal data private companies can collect. (The state, of course, can collect all it wants.) The concept of watching what the world is doing, then molding a China-suitable solution, isn’t unique to tech, Webster says. “This is just how China’s policy makers work: They actively compare other systems.”

Chinese regulators might be cribbing from elsewhere to an extent, but they’re very much forging their own path with how they seek to control the tech sector. And, as more regulation rolls in, it will only further splinter an already splintered internet. But, Webster argues, there may be lessons to learn from what China is tackling, rathan than how it’s going about it. “There are smart people working hard to try to reshape the Chinese digital economy,” he says. “The job is not that different, even though the political systems are.”