In the wake of the new pneumonia epidemic, China’s Internet giants have invested in community group buying, which has greatly enlivened China’s e-commerce market, but also ushered in the official “nine no’s” anti-monopoly control red line. Analysts believe that China has its own anti-monopoly law and anti-unfair competition law, which can be strictly enforced, but it wants to “sing a high tune” anti-monopoly, which is a bit of a “leek-cutting”, and wants to control data and personal capital of all Internet companies from giants to small businesses. If this plan is realized, then the Chinese government will be able to make the Internet companies, which are in control of data and personal capital, rely entirely on the Communist Party of China’s self-distribution. If this plan is realized, the CCP is said to have entered a stage of “exquisite totalitarianism”.
China’s General Administration of Market Supervision and the Ministry of Commerce recently held an administrative guidance meeting to regulate the order of community group purchase, the Internet giant Alibaba, Tencent, Jingdong, Meituan, Jindo, DDT and other six enterprises to participate. The meeting required the operation of community group purchase online platform operators must strictly comply with the “nine shall not”, including: shall not abuse independent pricing through low price dumping, price collusion, price inflation, price fraud, etc.; shall not have monopoly agreements; shall not abuse market dominance; shall not restrict competition; shall not false propaganda; shall not use data (familiar customers spend more money on consumption instead); shall not use technical means to harm the order of competition; shall not illegally collect and abuse consumer information; shall not sell counterfeit goods, etc.
In an interview with the Voice of America, Taiwan Hong Kong Association Director General Samp said that a speech by Chinese economist Zhang Wuchang, who was invited by the Chinese State Administration of Market Supervision and Administration to deliver a speech in Guangzhou in September 2018, was circulated on the Internet but has now been taken down, and it reads, “You can’t get China’s economy going at all if you don’t let Ma Yun and Ma Huateng monopolize “. As you can see, monopoly is supposed to be tacitly allowed under the Chinese Communist Party system.
But recently, the State Administration of Supervision has done a lot of things to crack down on Internet giants, such as Ali’s acquisition of Yintai Commercial, Tencent’s ReadWrite’s acquisition of Xinli Media, and Shunfeng’s acquisition of China Post Smart Delivery by Feng Chao Network.
The crackdown is “cutting leeks”?
The next crackdown by the Chinese government was even tougher and began to look like “cutting the leeks,” according to Samp. Alibaba founder Jack Ma is still missing and has not appeared in public for two months. Moreover, the “nine no-no’s” are not a new piece of legislation that needs to be strongly promoted by the government, but rather, they were originally provided for in China’s anti-monopoly law and anti-unfair competition law, and the government only needs to strictly enforce them. “This is something that dictatorial regimes often do.
Samp said: “Fundamentally this anti-monopoly law, anti-unfair competition law is inside this socialist system, is the way the Chinese party-state to manipulate these enterprises. Any private voice, because of this Xi Jinping came to power or Hu Wen late start the country into the people retreat. After the retreat of the state, there is very little room for the people, and now you see these are all party enterprises or military enterprises, basically their role is not really private enterprises. You have to understand, China and the United States-style corporate social responsibility is not the same, it (the United States) is to say that each enterprise you need to protect the market order, and everyone has a fair chance to compete; China under the Communist Party, there is no fair chance to compete, talk about how to protect the market? That is not a market, that is only a communist casino, or into a slaughterhouse, he can slaughter his dissatisfied a business.”
Thorpe said that only when a dominant position in the market is abused and prices are deliberately low to cause cut-throat competition is called monopoly, but now consumers have many choices, not just Alibaba but not Tencent, so there is no economic monopoly to speak of. The Chinese government’s aim is to make all people feel fearful by decree, and to see that Jack Ma wants to leave but can’t, and can’t return to his home, and use this to scare all those who want to suppress it.
The company’s main goal is to make sure that the company’s products and services are available to the public.
He said: “It is not only suppressing the six online platforms of Alibaba, Tencent, Kyoto, Meituan and Jindo, but even those who are helping his subcontractors to operate, all of them have to be killed. What does that mean? The Chinese Communist Party is very interested in these online platform operators, although it is the difference between the left pocket and the right pocket, both are owned by the Party, but what do you control the platform operators? The information ah, control of personal information ah, control of a lot of business news, these things are not reported from the party committee of the enterprise, and some can have room to roam, then he wants this space are completely extinguished, the method is to break it.”
By relying on the party’s self-assignment to do things?
According to Thump, this is no longer a matter of a so-called small stallholder or small supermarket being bullied and defeated by low price dumping, and the Communist Party coming out to do justice and bailing them out, it’s not that at all.
He said, “There is no room for a small stallholder or a small supermarket to get evenly distributed, as long as he is a little bit bigger or a thorn in the side of the party-state, he will also be suppressed. Only when you are in a helpless, isolated state, each atomized situation, you will be the easiest situation for the party to manipulate, which is the same as saying that you want to put the whole society in an isolated state, completely dependent on the party’s self-distribution and nose to do things, that once this is spread, once the realization, then the CCP is entering a point of exquisite totalitarianism, that is, totalitarianism to be handled and carried out in a refined way, that This is very scary, because it is the same as taking the rough and crude totalitarianism of Mao Zedong’s era and putting on a suit and continuing to be a rogue in the modern society of technological and commercial progress, and continuing to realize its hegemony and totalitarianism in the complex business environment. This thing is very successful in terms of his standards, and now is the way to treat some of this.”
The rise of community group buying
As for the origins of community group buying, Chen Yun, a professor at Fudan University’s School of International Relations and Public Affairs, told VOA that it was born in Changsha in 2017 with a founding company called “Xingsheng Yousei,” which was just a convenience store in 2014, and business was becoming increasingly difficult due to the impact of online shopping on the Internet. After conducting market research, the owner found that some convenience stores had increased customer traffic by grafting on a courier collection and delivery point and a deposit point, and when customers came to pick up the courier, they would buy something along the way and business became good.
The store owner then thought, if the courier point is replaced by the daily need for fruit and vegetable pick-up point, is not better? He started recruiting “leaders”, who opened a WeChat group to count the demand for fruits and vegetables from the community, and the next day residents could pick them up at the convenience store. In this way, the convenience store became more prosperous, the community group purchase of fruits and vegetables business is also booming. Chen Yun said, at that time, the community group purchase needs a physical store as a collection point of fruits and vegetables, but also to employ the “head” (these leaders are generally by the residents of the neighborhood of the grandparents or “mother” as) to count the aggregate number, in fact, is a The “slow business”.
Chen Yun said that the community group purchase is not impossible to do, the problem is “monopoly”. 2020 in China’s major cities, because of the epidemic, resulting in a very special market environment, online shopping has become an effective way to reduce the spread of the virus. At one time, the community group purchase, which was originally a grassroots enterprise slowly operating in mainland cities, was suddenly concerned by the Internet giant enterprises, which entered the community group purchase and began to burn money to pave the way for a major expansion.
Chen Yun said: “Now still in the subsidy stage, is the stage of subsidies to grab customers, but it points to the future (monopoly), they burn money to subsidize the purpose of forming their own monopoly in this field, at that time consumers will not have any subsidies, by then may be to kill the ripe, may be it monopoly pricing. Just like drops in the monopoly, its entire service, its pricing on a lot of complaints. This is compared to the time when there were several companies competing with each other in the market, completely changed a face.”
Community group buying must fulfill corporate social responsibility
Chen Yun stressed that community group buying has a positive function under the epidemic, and there is nothing wrong with Internet giants getting involved in it, but they must fulfill their corporate social responsibility and not violate the relevant provisions of the anti-monopoly law and the anti-unfair competition law, causing the whole ecological pattern of the market and society to deteriorate even more.
Secondly, urban public space and multi-cultural and local characteristics can also be replaced and destroyed by the standardized model represented by the Internet economy; in addition, the security risks caused by the leakage of personal information are also a major problem facing the Internet economy. Therefore, a strong market regulatory mechanism is needed, legislation to strengthen the regulatory environment, and urge companies to do their social responsibility and say no to those who dump low prices and act against fair competition in the market.
Chen Yun said: “Internet companies backed by capital are the biggest winners, small vendors in the community may lose their jobs and their income will be reduced, even those moms and heads they have no say, the distribution pattern will continue to deteriorate. Unemployment and the deterioration of the distribution pattern, the deterioration of the competitive market environment, as well as the serious deterioration of the entire city’s industry, are the Internet giants to join the community group buying after a new pattern or risk!
Chen Yun said, in fact, now as the “head” of the community store owners are also very sense of crisis, because they know that, following the vegetable market vendors, facing unemployment and reduced income will be their group. Once the layout of the Internet giants take shape, they will have to seize not only the vegetables and fruits in the hands of vegetable vendors, but also community stores operating daily necessities, and even home appliances. The situation where no grass grows under the feet of the giant elephant is not alarming.
Problem solver or troublemaker?
Chen Yun said that the Chinese government previously announced to create 9 million jobs in 2020, however, the college graduates in 2020 reached 8.74 million, “so this 9 million jobs is left for college graduates is almost, then there is also under the epidemic, so many unemployed people how to do ah? There is actually unemployment of all sizes in all industries. So at this time, if the Internet companies come in and take away the business of the vendors in the community, this will cause a great deal of social instability, which is a problem. (2020 Internet big business to kill) community group purchase at the beginning, we still think it is a problem solver under the epidemic, but in the long run, it is a troublemaker.”
In an interview with the Voice of America, Zhao Chunshan, a professor emeritus at the Mainland Institute of Tamkang University and a former key think-tank on cross-strait policy during Taiwan’s Ma Ying-jeou presidency, argued that China’s anti-monopoly “nine no-nos” on community group purchases are necessary to maintain social stability and reshape its external image, both internally and externally.
Zhao Chunshan said that in the opening report of the 19th National Congress, Chinese President Xi Jinping clearly identified “the contradiction between the people’s growing need for a better life and the unbalanced and insufficient development” as the main contradiction in China, and recently, the Political Bureau of the CPC Central Committee held an economic work meeting and again mentioned anti-monopoly and preventing the disorderly expansion of capital.
Maintaining social stability and reshaping international image
Zhao Chunshan said: “In the 19th National Congress, it is very clear that it is necessary to have social justice, that is, not to suffer from inequality, which is the main contradiction in mainland China, this contradiction is not solved, he has problems. So you can see, he is not just anti-monopoly such things, he includes a variety of industries, like the film and television industry, those big stars on the income, he will take measures to suppress your income, this is what he must do. Social conflicts are getting bigger and bigger, social unrest, social unrest is his Achilles heel, and he has to deal with this.”
Externally, Zhao Chunshan believes that China has noticed that it cannot long be perceived by the U.S. side as growing and thriving by unfair treatment, stealing intellectual property rights or slave labor, and that if it wants to go to the world stage it must play by international rules, otherwise there is no way to assume the role of a rising power. Therefore, from the inside out, China has the need for anti-monopoly.
Zhao Chunshan said: “Because you want multilateralism, you want to engage in globalization, before when you are still developing you can take advantage of some; not now, now you are slowly a big country, so you must be in accordance with the WTO, according to the rules of the game to do, so I think he dealt with this I am in favor of this. Because you have passed that era, this you can no longer let the United States feel that you have been taking advantage of him, but also can not let other countries think that you take advantage because of the WTO, in turn, eat my, so he must now do some measures. I think he himself also from within, internally he has to eliminate some unfairness, some inequality, communism emphasizes this very much; unevenness, unfairness, too big a gap between rich and poor, this has an impact on his whole regime.”
The lower and middle class “lower masses” are excluded
Commentator Zhu Xueheng pointed out in an interview with the Voice of America that those who can afford to buy and live in a community in China are usually white-collar workers of a certain economic level, so the “community group purchase” has seriously marginalized the lower-middle class “low-end masses” who do not have the means to live in the community. The “community group buying” is therefore a serious crowding out of the lower and middle class “low end” who do not have access to the community. Community group buying is commercially correct, but it is incorrect in terms of national governance.
Zhu Xueheng said that the second is the so-called farm to market to table path is interrupted, which is very, very bad for the lower and middle classes.
He said: “So this must be a master economist over there, a push down to find the end of the line over there, the end is all the middlemen and all the middle to be able to make some money in the stalls are replaced, there is no so-called blue-collar class of vegetable sellers, stalls of people, which is very, very dangerous for the appeasement of the middle and lower classes. You deprive a lot of jobs, and you do not hire them, that creates a problem, this is the conflict between stability and business expansion, so now the state must take over.”
Recently, after a wave of strengthened anti-monopoly oaths, the People’s Daily commented on the community group-buying boom, saying “Internet giants don’t just think about the flow of a few bundles of cabbage and a few pounds of fruit, but should be responsible for technological innovation.”
Innovation ability is the key for China to get out of economic difficulties
In this regard, Chen Yun, a professor at the School of International Relations and Public Affairs of Fudan University, said that the practice of Chinese Internet companies using capital advantages and traffic advantages to continuously capture the next Shen market shows that these Internet companies lack real innovation ability, they are just using the technology invented by others, and then grafted to China’s huge population market to grab the cake in the field of life services.
She said that in the context of the trade friction between China and the United States, the ability to innovate is the key for China to get out of its economic predicament: “But Internet companies are concerned about the profits here in the community of cabbages and radishes, and there are very few companies that really go into innovation, especially compared to these Internet companies in the United States. So China’s Internet companies are actually a relatively low level of innovation, it is a low level of expansion, the user is the life service industry, take-away la, courier la, is to sink the market as the object, no real content innovation, is a low level of state.”
According to Chen Yun, the Chinese government has taken action to crack down on community group buying, offering an “anti-monopoly” banner to cut off the chain of barbaric growth of the Internet giants previously skilled in using capital to take over the city. To put it optimistically, this may have a reverse effect, allowing companies to turn around and think about a real innovative path.
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