Jack Ma, founder of Alibaba Group, during the opening ceremony of the 3rd Summit of Young Entrepreneurs across China on September 25, 2020 in Fuzhou, Fujian Province of China.
Lyu Ming | China News Service Getty Images
China announced new antitrust rules over the weekend, but is unlikely to have much of an impact on the market for now, according to a market observer.
“The new regulation is still, as you know, a bit incomplete in detail,” Hao Hong, chief executive and chief research officer of Bank of Communications International, told CNBC’s “Street Signs Asia.”
The Chinese State Administration for Market Regulation (MRSA) has tightened restrictions on China’s internet giants such as Alibaba and Meituan, and introduced new guidelines on Sunday to curb monopolistic behavior. The new rules formalize a draft that was published months earlier.
Still, development appeared to have little impact on the shares of China’s internet giants, with most of them still in positive territory on Monday afternoon in Hong Kong: Tencent rose 0.82%, Meituan jumped 1.54% and JD.com gained 1.14%. Only Alibaba outperformed the trend, dropping around 0.16%.
Monday’s market movements contrasted with November volatility, when shares in Hong Kong of Chinese tech giants plummeted after the regulator’s initial announcement. After the antitrust guidelines were first proposed, millions of dollars in market value were eliminated.
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.
“Regulation, you know, starts with a very good intention,” Hong said. “The real fact is that … the position in the market … of these big internet platforms is very hard to get into for now.”
While Hong acknowledged that the new rules “will facilitate the growth of younger boys,” he also added that many of the big Internet players, such as Alibaba and Tencent, have also “put their own money into many of the startups. from the Internet. “
Some notable examples of these investments include Alibaba’s stake in financial technology giant Ant Group and Tencent’s support for short video firm Kuaishou, which saw strong investor interest on Friday during its $ 5,000 public listing. million dollars in Hong Kong.
The increase in the Beijing exam comes at a time when the technology industry is under regulatory focus around the world, with similar movements in the US and the European Union.
– CNBC’s Evelyn Cheng contributed to this report.