All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

China enhances regulation of technology sector

Sponsored by sponsored-firms-kpmg.png
Rules have been issued about electronic issuance

Lewis Lu of KPMG sets out the key elements from China’s strategy of stepping-up its regulatory oversight of the evolving technological space.

China’s economy has been rapidly changing, with advances in the technological level of the economy and increased economic digitalisation. These trends have been further spurred along in the COVID-19 disruption period, as has been the case in other economies.

The Chinese government has recently been taking steps to upgrade the regulatory framework for this environment – many of the latest steps mirror developments in the US and Europe. The notable developments in this regard are as follows.

New anti-monopoly measures for internet platforms

On November 10 2020, China’s State Administration for Market Regulation (SAMR) released the draft anti-monopoly measures for internet platforms. These are designed to curb the dominance of the big internet firms and protect fair competition in the market. The SAMR draft measures are under public consultation until November 30.

Anti-monopoly rules are not new in China. However, this is the first time that the Chinese government has defined anti-competitive behaviours for the online economy. This includes online platforms treating customers differently based on their spending behaviour and data and forcing sellers to sell exclusively on a given platform. Under the draft measures, particular focus is put on horizontal monopoly agreements in the online platform market, which are generally designed to exclude and limit competition – businesses selling through platforms are directed by the measures to report such monopoly agreements to the authorities for investigation.

These moves, directed at China’s technology giants, have parallels with the increasing global trend for regulators to take action against big technology companies, for instance, the investigations into Amazon, Google, etc. launched by authorities in the US and Europe. This being said the Chinese government still provides extensive policy support for the development of the internet and technology sectors.

Export control law

China has also recently introduced an export control law which covers military products, nuclear equipment, and other technologies deemed important for national security. The law comes into effect on December 1 2020 and fills gaps in China’s oversight and administration over technology exports. It also reflects parallel measures adopted in the EU and US in recent times.

Compared with the draft law released in July 2020, technical information and data were also included in the scope of the final law. This means that merger and acquisition (M&A) transactions in connection with Chinese digital economy companies can now fall within the purview of the law. Also, in the technology regulation space, China continues to be actively engaged, alongside the EU, US and others, in the BEPS 2.0 process to update global tax rules for the digital era, for which blueprints were released in October. As elsewhere, Chinese businesses and public authorities are eagerly awaiting the planned finalisation of the rules in mid-2021.


In another new development, China signed the Regional Comprehensive Economic Partnership (RCEP) agreement on November 15 2020, along with 14 other Asia-Pacific countries, including Japan, South Korea, Australia, New Zealand, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The RCEP is the largest free trade deal in the world, and will facilitate the ongoing integration of these economies, including in the technology and digital spaces.


Lewis Lu

T: +86 21 2212 3421









More from across our site

But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
12th annual awards announce winners
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
Businesses must ensure any alternative benchmark rate is included in their TP studies and approved by tax authorities, as Libor for the US ends in exactly a year.
Tax directors warn that a lack of adequate planning for VAT rule changes could leave businesses exposed to regulatory errors and costly fines.
Tax professionals have urged suppliers of goods from Great Britain to Northern Ireland to pause any plans to restructure their supply chains following the NI Protocol Bill.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree