Chinese internet moguls like Tencent’s Pony Ma have dropped from key lawmaking and advisory bodies, replaced by chip researchers and engineers in a sign of Beijing’s lingering distrust for private enterprise and focus on winning the tech race with the US.
(Bloomberg) — Chinese internet moguls like Tencent’s Pony Ma have dropped from key lawmaking and advisory bodies, replaced by chip researchers and engineers in a sign of Beijing’s lingering distrust for private enterprise and focus on winning the tech race with the US.
Big-name internet entrepreneurs like Baidu Inc. Chief Executive Officer Robin Li and Tencent Holdings Ltd.’s chairman vanished from this year’s list of National People’s Congress and CPPCC participants, a notable absence that suggests Beijing isn’t ready to unshackle the private sector after waging a two-year campaign to rein in tech companies. In their time on the nation’s supreme legislative body, the two men had championed key policies that Beijing later went on to adopt — and their absence will diminish the influence of China’s internet players on future policy direction.
The NPC, the national parliament that plays a largely symbolic role in Chinese decision making, is closely watched for gestures of endorsement by Beijing’s inner circle. Its annual summit commences this weekend, alongside one for the advisory Chinese People’s Political Consultative Conference, bringing together thousands of delegates from various social strata across the country. It serves to demonstrate how strong President Xi Jinping’s grasp on power is heading into his third term, as well as an occasion to announce economic targets for the year.
Xi has called for faster scientific breakthroughs to help China secure self-sufficiency in semiconductors and other advanced technology as Washington mounts pressure through trade sanctions and restrictions. He also ordered the ruling Communist Party to exercise more control over the country’s science and technology agenda, paving the way for the creation of an even more powerful overseer to steer a tech war against the US. Vice Premier Liu He echoed that sentiment in potentially his final official address as the country’s economic policy architect, suggesting a successor will follow the same playbook.
Beijing is gearing up investments in the semiconductor industry this year as the US draws key allies into its effort to contain China. It pledged an additional $1.9 billion toward the country’s biggest maker of memory chips, a deal that may herald a renewed influx of government capital. The Yangtze Memory Technologies Co. investment marks the fund’s most significant deal in months.
Chip stocks surged Friday on the growing signs of official support — and despite Washington adding more than a dozen Chinese firms including server maker Inspur Group to its technology blacklist. Biwin Storage Technology Co. surged its 20% limit in Shanghai, leading a broad rally in industry players such as Shenzhen Fine Made Electronics Group Co. Top Chinese chipmaker Semiconductor Manufacturing International Corp. climbed as much as 2.5% in Hong Kong.
Read more: China Plans to Inject $1.9 Billion Into Top Memory Chipmaker
That broader vision is borne out in the government roster.
Among those on the NPC list were prominent figures who embodied Xi’s aspirations in strategic fields from semiconductors and electric vehicles to artificial intelligence. They included a top chips expert who recently proposed ways to counter US sanctions; Xiaomi Corp. chairman-turned-EV entrepreneur Lei Jun; and the chairman of state-backed chipmaker Hua Hong Semiconductor Ltd. AI chip developer Cambricon Technologies Corp.’s Chairman Chen Tianshi will take up a position on the CPPCC.
The ranks of lawmakers and advisers are revised every five years — sometimes dramatically — and members that drop off can and have made comebacks. The rosters also aren’t completely bereft of internet luminaries: 58.com Inc.’s Yao Jinbo remains a delegate. But the deck is clearly stacked against them. The current list conveys the thinking at the very top, and this year features about 100 experts spanning advanced research topics like new materials, aerospace tech and advanced manufacturing.
“If China can build its own technology from scratch, it solves its problem with US export controls,” said Bao Linghao, senior analyst at Trivium China. “We will see increasing efforts to revamp China’s basic research system. There are not many other options left.”
China already promoted some officials with a technology background to the 24-man Politburo last year. Ma Xingrui, the Party chief of Xinjiang, was previously an aviation tech engineer. Yuan Jiajun, Party chief of Chongqing, led China’s space project. Li Ganjie, another Politburo member, was a nuclear expert.
The technocrats’ promotion to elevated positions comes at a perilous time for the country’s chipmaking ambitions. The US is coordinating an intensifying campaign to choke off China’s access to key advanced tech, from blacklisting companies like Huawei Technologies Co. to recruiting Japan and the Netherlands to join in the trade curbs.
–With assistance from April Ma and Jacob Gu.
(Updates with share action from the sixth paragraph)
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