What’s new: The Communist Party’s official newspaper has endorsed Beijing’s latest slogan of regulating capital expansion with “traffic lights,” saying the approach sets rules and a bottom line aimed at ensuring businesses “obey the leadership of the party.”
In doing so, the People’s Daily editorial (link in Chinese) said that the country should improve management of market access, strengthen market source control and industry supervision, enhance anti-monopoly and anti-unfair competition regulations, and prevent capital from growing wild.
The editorial added that the “traffic light” approach is about “developing capital in an orderly manner” and not about “doing away with capital.”
Why it matters: China’s top leadership most recently used the term of setting up “traffic lights” to rein in the “disorderly expansion of capital,” in an annual Central Economic Work Conference (CEWC) in December.
Over the last year, China intensified its crackdown on capital expansion in sectors including the platform economy, online gaming and after-school tutoring. The party’s anti-corruption campaign also extended into the area punishing officials who were accused of “supporting the disorderly expansion of capital.”
Contact reporter Lu Zhenhua (zhenhualu@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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