By Helmo Preuss: economist at Forecaster Ecosa

The announcement by Macau authorities on September 14 that there would be a 45-day public consultation on gambling in the territory shows that Chinese regulatory tightening has shifted from internet technology companies to d ‘other areas. Stock prices of US casino companies that operate in Macau, which is the only place where gambling is legal in China, have plunged in response to the announcement, although public consultation is only just beginning.

The government of the semi-autonomous Chinese territory was considering changes in nine areas, Macau Economic and Financial Secretary Lei Wai Nong told reporters. These areas include the number of gaming licenses issued and their duration, a stricter review mechanism for operator approval and employee welfare.

Investors have already seen some $ 3 trillion wiped out of the market value of the nation’s largest tech companies in response to tightening government regulations aimed at curbing monopoly behavior and promoting a better way of life for its citizens.

Regulators have reduced the amount of time gamers under the age of 18 can spend playing online games to one hour of play on Fridays, weekends and holidays, in response to growing concern over gambling addiction. some commentators have called it “social opium”.

The State Administration of Market Regulation (SAMR), which is similar to South Africa’s Competition Commission, said it would further regulate the sharing economy, a sector that includes companies facilitating carpooling, bike sharing, house sharing and even pooling phone batteries.

China is building its own state-backed cloud system – ‘guo zi yun’ – which translates to ‘state asset cloud’, in direct competition with cloud services offered by Chinese tech giants such as Alibaba, Huawei and Tencent. Many state-controlled entities will then be forced to migrate to the state cloud from the private cloud.

In the same way that subliminal advertising, which are messages the conscious mind cannot perceive, is banned in most countries, the Cyberspace Administration of China has stated that companies must respect business ethics and principles of fairness and must not set up algorithm models that induce users to spend large sums of money or to spend money in a way that may disrupt public order.

In May, three financial regulators expanded restrictions on China’s cryptocurrency industry by banning banks and online payment companies from using cryptocurrency for payment or settlement. They also banned institutions from providing exchange services between cryptocurrencies and fiat currencies, and banned fund managers from investing in cryptocurrencies as assets. As a result of these stricter regulations, provincial governments restricted bitcoin mining, which used large amounts of energy.

The Housing Ministry and seven other regulators have also sought to “improve order” in the real estate sector in hopes of avoiding an asset bubble. Additional policy measures to promote social goals have the potential to move markets.

Fitch Ratings said there were legitimate economic and regulatory considerations at play in China’s regulatory crackdown on internet-focused tech companies, private education companies and overseas registrations, but a brutal execution policy and communications strategy could alter the regulatory risk premium that global investors need to invest. in Chinese titles.

“The list of government policy considerations is diverse, but broadly encompasses data privacy, national security, socio-economic considerations, and the recognition that regulatory oversight has not kept up with the growing reach and influence of the government. China’s online sector, ”Fitch said.

He noted that many of these regulatory issues are not specific to China, and other governments have also implemented related reforms in recent years.

“The new Chinese regulations will affect the competitive landscape, profitability and cash generation of companies in the affected sectors, but we do not believe that the changes themselves will have negative spillover effects on the wider operating environment for Chinese companies.” , added Fitch.

With tighter Chinese regulations impacting fundamental areas of society, it may be wise for investors to consider whether there could be ripple effects outside of China if other regulators follow suit. not. Global giants elsewhere in the world may well be vulnerable to some form of regulatory or judicial sanction.

Apple lost $ 85 billion in market capitalization on September 10 after a U.S. federal judge ordered the company to change the way it operates its App Store, which would hurt the profitability of this business unit.

* Helmo Preuss is an economist at Forecaster Ecosa

** The opinions expressed here are not necessarily those of the IOL.