DESPITE the market’s concern about China’s regulatory tightening recently on the tech sector hurting corporate earnings and stifling innovation, the move has put China’s economy on a more sustainable path with a cleaner government than before – even though it has caused market volatility. Rather than stifling innovation, the regulatory tightening since President Xi Jinping came to power has effectively reduced systemic risk by fixing key loopholes in the Chinese system and increased its efficiency by stabilising China’s productivity growth after years of decline.
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