- With the latest regulatory crackdowns on DiDi and the private education sector, the severity was arguably driven largely by company- and sector-specific factors.
- The private education crackdown likely relates to China's potential demographic crisis. Sectors viewed as detrimental to society are at heightened risk with China's regulatory regime.
- Many of Chinese regulators' concerns are not unlike those of their Western counterparts, e.g. monopolistic practices, housing costs, development of domestic capital markets, and perceived consumer data/national security risks.
- An obvious difference is the abruptness of Chinese regulatory actions, which exacerbates suspicion towards China's authoritarianism. Investors are accustomed to things like "checks and balances".
- One approach is to watch and wait, and stick to major companies like Alibaba -- China benefits immensely from its tech giants driving the economy forward.
For further details see:
Alibaba/DiDi: Regulatory Risks, Revisited