Global investment darling Jack Ma was the most prominent victim of Beijing's crackdown on big tech. Photo: AFP / Philippe Lopez

A “profound transformation” in China’s business and cultural sectors is on track as shown by four incidents on October 8, according to the latest article written by a columnist who first mentioned the reforms later dubbed “Cultural Revolution 2.0”.

The incidents included new rules to cut off private investments’ influence on media outlets, a fine of 3.44 billon yuan (US$534 million) on the Hong Kong-listed food deliverer Meituan, the ban of Lenovo’s IPO plan in Shanghai and the arrest of Luo Changping, who smeared the patriotic movie The Battle at Lake Changjin.

Meanwhile, mainland media reported on Tuesday that Ant Group, an affiliate company of e-commerce giant Alibaba, had sold all its stake in Caixin Media, which is famous for its investigative reports about China’s anti-corruption campaign.

Mango Excellent Media Co Ltd, a Hunan-based new media company, said on September 23 that Alibaba had sold all its stake in the company.

Since Beijing banned Ant Group from listing in the United States last November, it has launched measures to curb technology giants including Tencent and Didi Global and new rules to restrict the education, property and entertainment sectors this year. In the summer, China also announced a ban on feminine-looking male celebrities and ordered that people under 18 were only allowed to play video games for three hours a week.

On August 17, President Xi Jinping, General Secretary of the Communist Party of China, said in the party’s Financial and Economic Affairs Committee that China should aim to promote “common prosperity.”

While the public could not understand Beijing’s motives for the moves, Li Guangman, a former editor-in-chief of the Central China Electric Power News, which was closed in 2013, published an article on August 28 and said a “profound transformation” was underway in China.

Chinese President Xi Jinping is seeking to recalibrate his economy and society. Photo: AFP

He said the reform was launched to respond to the United States’ brutal and ferocious attacks as well as the complicated international situation. However, the movement was described by political commentators as “Cultural Revolution 2.0.”

Chinese Vice Premier Liu He said on September 6 that the Chinese government did not change its policy direction and would continue to support the growth of private sectors, which have contributed to the country’s economy, job markets and industry upgrade. Liu said China would continue to open up its economy while pushing forward its socialist market economy reform.

On October 10, Li published another article, saying that “China is undergoing a profound transformation. It’s changing our society, thoughts, concepts and lives and it will not be stopped by the will of some people or groups with vested interests.”

He said it was a wise move for state capital to fully recover its power in the news and public opinion sectors through the “negative list for market access” proposed by the National Development and Reform Commission (NDRC), instead of the government department in charge of news and public opinion propaganda. He said once the negative list took effect, China’s media sector would have a “profound transformation.”

On October 8, the NDRC and Ministry of Commerce started a seven-day public consultation for its negative list for market access (2021). Under the new rules, non-public capital will be banned from investing in or operating media outlets, including news agencies, newspapers, TV broadcasters and news websites. They will also be forbidden to run any news channels or accounts on social media platforms and participate in media activities that will direct public opinions on topics including politics, economy, military, foreign affairs, important social issues, culture, technology, health, education and sport.

Non-public capital cannot quote or use news from overseas or hold forums and award events related to the news and public opinion sectors. Besides, public capital must have the controlling stake in all mainland media companies even after they are listed, according to the new rules.

Citing an article published by the Central committee of the Communist Youth League of China in July 2016, Li said in his latest article that some private groups had controlled some media outlets and started grooming their “cultural elites” to control the public opinions and the society.

In June 2015, Alibaba purchased a 30% stake in Yicai Media Group and planned to transform the Shanghai-based news platform into a so-called “Chinese Bloomberg.” It acquired the South China Morning Post in Hong Kong in December 2015 and invested in Caixin Media in March 2016. Last December, Alibaba continued expanding its media empire by acquiring a 5% stake in the Shenzhen-listed Mango Excellent Media for 6.2 billion yuan and becoming its second-largest shareholder.

Alibaba’s influence on public opinion upset regulators. Photo: AFP

In March this year, the Wall Street Journal reported that Alibaba was ordered by regulators to spin off its media assets to reduce its influence on public opinion. On Tuesday, Alibaba’s founder Jack Ma reportedly appeared in Hong Kong and met some business partners.

On the same day, a mainland article reported that Ant Group had no longer held any stake in Caixin, following Alibaba’s move to dispose of all its shares in Mango Excellent Media last month. Caixin’s founder Hui Shuli has also become controversial after her media published on October 2 a food critic review about pig-head dishes that allude to Xi.  

Li also said China’s “profound transformation” was shown by the facts that Meituan was fined 3.44 billon yuan by the State Administration for Market Supervision and Lenovo was banned from listing on the Shanghai Stock Exchange Science and Technology Innovation Board.

He said Meituan had reduced market competition with its monopoly status, hurt the legal rights of restaurants and consumers and failed to protect the labor rights of its deliverers. He criticized Lenovo, which produces laptop computers, for its high gearing ratio and low investment in research and development.

“If Lenovo wants to go public, it must answer whether it is an innovative technology company and whether it’s based in China,” Li said. “Lenovo has headquarters in the US, China and Singapore. People have raised questions about whether it is a Chinese company.”

Li said the Chinese stock market would only serve the fundraising needs of the real innovative technology firms, but not become an ATM machine or a milk cow for big capital groups.

On September 30, Lenovo submitted its listing application to Shanghai Stock Exchange but the request was turned down by the bourse on October 8, the first working day after a week-long National Day holiday.

Finally, Li said it was right to arrest Luo as he smeared the Chinese soldiers who sacrificed their lives to fight against the US army in the Battle at Lake Changjin in the Korean War in 1950. He said the Chinese society would no longer tolerate anyone who slanders revolutionary martyrs and leaders.

On September 30, patriotic blockbuster The Battle at Lake Changjin was released in China, claiming the country’s victory in the Korean War. On October 6, Luo said in a message on Weibo that few people in China were introspective about whether the Chinese army’s participation in the Korean War was a correct move and whether many Chinese soldiers died in cold weather was a wise decision. Luo was arrested by the police in Hainan province for allegedly “defaming heroes and martyrs.”

Read: China on the cusp of a ‘profound transformation’