The Chinese Government created a recovery plan after the beginning of the Covid-19 pandemic in Wuhan 2019. Since then, the Chinese Government has planned to fuel the country’s economy and achieve the targeted economic growth.
The beginning of this year was good for China as the second economy of the world had an 18.3 % economic growth between January and March. However, in the second part of the year, things started to slow down, and many mentioned reasons such as the pandemic, scarceness of raw material, higher prices for raw material, pollution and more.
China is tightening its control over big companies
Recent reports predict that investors might need to avoid risky deals in China, as the country’s Government is trying to maintain control over the biggest and most profitable Chinese companies. For example, titans such as Alibaba Group Holding and Tencent Holding have had to readjust their growth targets. July was not a good month for Alibaba, 20% down. This growth pace is comparable to the one the company had back in September 2014.
The Chinese Government has always overshadowed the progress of big companies in China
The news that the Chinese market might not reach its growth target and that the Beijing Government is always involved in several companies’ financial and economic situation is no surprise for anyone. Back in February this year, everyone was writing about the Beijing Government and its decision to halt the public offering of Jack Ma’s Ant Group.
At the time, sources mentioned that the Beijing Government did not appreciate Ma’s critics, and the decision came after years of complex relations between the two parties. What is clear is that the Beijing Government will closely follow big companies with a huge amount of capital and influence inside China.