"Securing Shares and Appointing Directors"... China Directly Intervenes in Internet Companies' Management

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The Chinese government, which has recently been tightening control over internet technology companies, has taken more direct measures by acquiring shares in internet companies and appointing directors.

The Wall Street Journal (WSJ) reported on the 17th (local time) that Beijing ByteDance Technology, the Chinese local subsidiary of ByteDance, the parent company of the video platform TikTok, sold 1% of its shares to a Chinese state-owned enterprise in April and granted the right to appoint one director.

Weibo (the Chinese version of Twitter) also sold 1% of the shares of its Chinese subsidiary, Beijing Weimeng Technology, to a state-owned enterprise.

This state-owned enterprise holds the right to appoint one of the three directors of Weimeng and has veto power over certain matters.

These state-owned enterprises are wholly owned by an investment fund operated by the Cyberspace Administration of China, the country's internet regulatory authority.

The Cyberspace Administration of China is reported to have regularly dispatched managers to major internet platform companies this year to monitor compliance with regulations.

WSJ evaluated the acquisition of shares by Chinese state-owned enterprises as another move by the Chinese government to establish a foothold in social media companies and strengthen control over internet public opinion.

The Beijing office of China's cyber regulatory agency, the Cyberspace Administration of China (CAC)
[Image source=Yonhap News]

Previously, Chinese authorities have been wary of the rapidly expanding influence of domestic internet companies. There are concerns that the rapid growth of these companies could diminish the Chinese Communist Party's exclusive power to shape public opinion.

This content was produced with the assistance of AI translation services.