Was There a Path to a Different Outcome?
What if Jack Ma had not stirred up the hornet’s nest? We would still be writing this article today, because the Chinese government’s reductionist intention (breaking down monopolies) was already causing investor concern. Tech companies had already started using their treasure troves of user data to expand their offerings. Tencent’s WeChat, for example, has broadened its functions from being a messaging app to offering social media, ordering good and services from various stores, paying bills, and transferring money. In many ways, Chinese tech giants have developed a much larger service offering than the Silicon Valley behemoths they set out to emulate. And were primed to come under scrutiny.
Remember that the antitrust sentiment is not limited to China. Political pressure in the US has been leaning towards breaking up monopolies. Facebook and Google have borne the brunt. On the other hand, investors in Facebook and Alphabet aren’t too worried. The stocks of these giants have spiked 101.88% and 78.57%, respectively, since the beginning of 2020. So, why should investors worry about Chinese tech giants?
In fact, the sentiment for tech giants under scrutiny in the US is not very different from the sentiment for their Chinese counterparts, as can be seen in the Acuity Trading Dashboard.