Beijing is improving the processing technology but a repeat of the 2021 crack is unlikely

Beijing has stepped up corporate controls this year, although analysts say there is little chance of a repeat of the 2021 crackdown that wiped more than $1 trillion from Chinese tech stocks.

Since January, officials have opened a formal antitrust investigation into the country’s largest online travel company Trip.com and named a dozen tech giants — including Alibaba, Tencent, ByteDance’s Douyin, Baidu, JD.com and Meituan — over aggressive price competition and advertising claims ahead of the June shopping festival. They also sent a stern warning earlier this month to Walmart China over repeated food safety failures at its Sam’s Club supermarket.

“The sheer volume of action and the number of companies involved brings back memories of the deregulation of online platform companies” more than five years ago, said Neo Wang, chief China strategist at Evercore.

In a two-year period starting in late 2020, Beijing introduced a shocking crackdown on its most powerful companies, blocked what would have been the world’s largest fintech market for Alibaba’s Ant Group, forced giant Didi Global to move out of the US, and expanded its after-school care facilities sector.

“The state has been reasserting political control over data, financial expansion, educational ideas, international listings, platform power, and excessive monetization,” said Paul Triolo, who leads partner policy and technology in China at DGA-Albright Stonebridge Group, a global consulting firm.

But the game has changed, Triolo said, now that policymakers are more wary of an economy weighed down by weak domestic demand, a sluggish job market, and are eager for private tech companies to step up investment in the computing infrastructure that supports the country’s AI ambitions. Beijing is trying to do something but without “causing more investor panic,” he said.

Han Shen Lin, China country director at Asia Group, put it bluntly, saying “Beijing needs private sector confidence, jobs and technology investment more than it did in 2021.”

Beijing voted to support the private sector after years of austerity, with a rare closed-door meeting in February 2025 when Chinese President Xi Jinping told the country’s top businessmen, including Alibaba’s Jack Ma, to “show their talents” in a new era of the country’s private economy.

China has now made the so-called anti-deregulation campaign, aimed at dealing with inflationary price wars and overcapacity in all industries, a policy priority.

In January, Beijing launched an antitrust investigation into Trip.com for alleged “abuse of market dominance,” forcing sellers to make special deals in advance of travel commission fees. The move sent the Hong Kong company’s shares down nearly 20% in one day. Citibank analysts estimate that the ongoing antitrust investigation could result in fines of up to 4.9 billion yuan ($723 million).

In May, China’s market regulators again issued their strongest food security fines, hitting several e-commerce and food delivery platforms with a combined fine of 3.6 billion yuan for hosting uncertified sellers who compete on price.

Ahead of the “618” shopping festival, Beijing’s municipal regulator called out online retailers including Xiaohongshu – which has reportedly prepared to file privately for a public offering in Hong Kong – over misleading subsidy ads and a hidden fee scheme that shifts costs to sellers.

That same week, SAMR called Walmart China’s top management to an accountability meeting over repeated food safety failures at Sam’s Club membership stores, calling for an overhaul of its procurement controls. Sam’s Club set up a task force to overhaul its supply chain audit and replaced its chairman with Liu Peng, a former Alibaba executive.

Still, the move amounts to “a limited signal rather than a sustained crackdown,” said Ciel Qi, a research analyst at Rhodium Group.

Another reason for Beijing’s restraint: competition for the development of artificial intelligence with the US.

As Washington continues to pressure the creation of AI infrastructure for Chinese platforms and the looming threat of further restrictions, Beijing is determined to avoid undermining the competitiveness of its leading companies, Triolo said.

“Regulators are more involved than in 2021,” he said. “They need these companies to invest in AI infrastructure, cloud, things and consumer services.”