China’s technology sector under scrutiny

The Chinese government is keeping a close eye on and interfering in the management of the country’s technology sector, resulting in changes in the leadership of various technology groups, the latest example being Richard Liu, the CEO of JD.com.

The government’s interventionism in recent years has resulted in a proliferation of new rules, issued at regular intervals, that are imposed on companies in the sector in order to officially promote the welfare of the Chinese people and work for common prosperity.

These regulations have led to the resignation of executives, in part because of the requirement to reduce key-man risk, i.e., to avoid excessive dependence on one person or a small group of individuals for the value created by the company. Richard Liu, known as the Chinese Jeff Bezos, is the last big boss to leave his position as CEO at JD.com where he will be replaced by Xu Lei, the current Chairman of the company, but he is not leaving the company as he becomes Chairman of the Board.

His gradual withdrawal, if it has just been formalized definitively, had begun in 2018, after an accusation of rape that he continues to deny. For his part, Xu Lei had already moved within the company, since in September 2021 he had moved from head of the retail business to President of JD.com.

The year 2021 had already been rich in executive departures with notably Colin Huang, founder of e-commerce company Pinduoduo, who left the position of Group President, as well as Zhang Yiming, founder of ByteDance and Su Hua, co-founder of video application Kuaishou.

This growing interventionism in the technology sector is being closely watched at the international level, and national regulators around the world are not hesitating to take action to counter the threats that this sector could pose to other economies.

In the first quarter of 2022, the Security and Exchange Commission in the United States, for example, decided to deregister five new Chinese companies, including Baidu and its subsidiary iQIY, on the grounds that they had not met the audit requirements of the US regulator. The technological subject is particularly sensitive between China and the United States because on the Chinese side, the government wants to avoid that the Americans can have access to sensitive data of their economy.

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China’s technology sector under scrutiny

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China’s technology sector under scrutiny

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China’s technology sector under scrutiny

The Chinese government is keeping a close eye on and interfering in the management of the country's technology sector, resulting in changes in the leadership of various technology groups, the latest example being Richard Liu, the CEO of JD.com.

The government's interventionism in recent years has resulted in a proliferation of new rules, issued at regular intervals, that are imposed on companies in the sector in order to officially promote the welfare of the Chinese people and work for common prosperity.

These regulations have led to the resignation of executives, in part because of the requirement to reduce key-man risk, i.e., to avoid excessive dependence on one person or a small group of individuals for the value created by the company. Richard Liu, known as the Chinese Jeff Bezos, is the last big boss to leave his position as CEO at JD.com where he will be replaced by Xu Lei, the current Chairman of the company, but he is not leaving the company as he becomes Chairman of the Board.

His gradual withdrawal, if it has just been formalized definitively, had begun in 2018, after an accusation of rape that he continues to deny. For his part, Xu Lei had already moved within the company, since in September 2021 he had moved from head of the retail business to President of JD.com.

The year 2021 had already been rich in executive departures with notably Colin Huang, founder of e-commerce company Pinduoduo, who left the position of Group President, as well as Zhang Yiming, founder of ByteDance and Su Hua, co-founder of video application Kuaishou.

This growing interventionism in the technology sector is being closely watched at the international level, and national regulators around the world are not hesitating to take action to counter the threats that this sector could pose to other economies.

In the first quarter of 2022, the Security and Exchange Commission in the United States, for example, decided to deregister five new Chinese companies, including Baidu and its subsidiary iQIY, on the grounds that they had not met the audit requirements of the US regulator. The technological subject is particularly sensitive between China and the United States because on the Chinese side, the government wants to avoid that the Americans can have access to sensitive data of their economy.

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