A similar deal set up a government official as a director at ByteDance, the owner of TikTok.
, but the government isn't stepping away from the sector entirely. Rather than the strict approach that saw Alibaba fined billions, tech CEO Jack Ma temporarily disappear from the public eye, and game approvals slow to a trickle, thethat the government is switching tack, and moving to take"special management shares"—or"golden shares"—in many of China's leading tech companies, including Tencent.
These golden shares are relatively tiny—around 1% ordinarily—but confer rights over particular business decisions and appointments made at the companies in which they're taken.
We don't know what powers this share deal would eventually confer, but we can look to other, similar deals to get an idea. For example, when a state entity took a golden share in TikTok owner ByteDance, it gained the power to nominate one of the company's three directors.
So it looks like China's government is relaxing its grip, but keeping its hand firmly on the tiller when it comes to the nation's tech and games sector. It's also, weirdly, probably great news for the country's embattled investors and CEOs, who have had to watch in horror as theirby the intense scrutiny of the Chinese state for the last three years.
The golden shares arrangement feels primed to affect content in China more than the stuff it exports overseas, but it might actually end up dampening the rapid expansion of Chinese companies into non-Chinese markets in the short-term. Ahighlighted the extent to which a lot of overseas expansion by companies like Tencent had been driven by the fact that the government had effectively cut them off from the domestic Chinese market.
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