Editorial | Freeing of platform economy can only be good for China’s growth

Beijing’s crackdown on the roller-coaster development of the platform economy may not be held to blame for China’s economic slowdown. But nor has the constraint on the sector done anything to speed up recovery from the pandemic and control measures that are largely to blame.

It is good therefore that the crackdown is officially over, freeing the platform economy to look forward and realise its full potential for driving the recovery and sustainable growth.

The “rectification” of violations of laws and regulations by fintech companies, ending in restructuring and fines of up to 7 billion yuan (HK$7.6 billion; US$976.8 million) on the six biggest, has taken 2½ years. The central bank has brought the crackdown to a close with the massive fines and resumed “normalised management” of the industry.

The official language understates the significance of the platforms’ official rehabilitation. This is to be found in a policy statement from the National Development and Reform Commission (NDRC), the country’s top economic planner, putting the fintech sector front and centre of national economic goals.

The NDRC makes it clear the platform economy is seen as critical to China’s overall economic development, and is expected to help lead the way in advancing innovation and competitiveness. This is a very clear policy signal not only confirming that the crackdown is over, but also that Beijing sees the platform economy as core to national strategy and is prepared to give it very active support.