China signals its tech crackdown isn't ending anytime soon - and calls for tougher rules in other key industries
- China's tech crackdown will likely persist, a five-year plan on Wednesday showed.
- New laws will be drafted for other areas including national security, monopolies, and education.
- China's targeting of various industries has spooked investors, hitting stocks.
China issued a five-year blueprint on Wednesday that suggests its crackdown on the tech sector isn't subsiding anytime soon. It also signalled that new laws will be drafted for other key industries.
Authorities said they would actively work on legislation for national security, tech innovation, monopolies, and education, indicating that the recent crackdown on data privacy and antitrust issues will continue.
Artificial intelligence, big data, public health, internet finance, cloud computing, and laws pertaining to foreigners will also be strengthened, China's State Council and the Communist Party's Central Committee said in the document.
The announcement shows China is working to reshape its nation after the global spread of coronavirus, which first emerged in the city of Wuhan in December 2019.
"The people's growing need for a better life has put forward new and higher requirements for the construction of a government under the rule of law," authorities said. "It must be based on the overall situation, focus on the long term, make up for shortcomings, forge ahead, and promote the construction of a government under the rule of law in the new era to a new level."
China, once the world's largest bitcoin mining hub, has also cracked down on cryptocurrencies, driving operations out of the country to the US and other parts of Asia. Major banks in the country have been banned from providing crypto services.
Wednesday's announcement is an update to an earlier plan that ended in 2020.
Investors have been shaken by a flurry of regulatory moves from Beijing, adding pronounced risks to Chinese tech stocks. Authorities hit Jack Ma's Alibaba and Ant Group with anti-monopoly probes at the end of last year, and recently mandated cybersecurity reviews for foreign listings like Didi's NYSE debut.
Wedbush analyst Dan Ives has said that investors are struggling with the prospect of more regulation in China around the corner. The uncertain outlook has been a major deterrent to owning Chinese tech names, Ives said, and may be partly responsible for their underperformance so far this year.
Separately, China's banking and insurance regulator ordered insurers to curb improper marketing and pricing practices, and protect user privacy. Companies were warned that if they failed to comply, they would face "severe punishment."
Stocks including ZhongAn Online Property and Casualty Insurance and Ping An Insurance Group lost as much as 9% in the morning session.