| Hi all, it's Zheping in Hong Kong. Last week, China's biggest tech companies shed almost $290 billion in market value in two days. For context, that's roughly equivalent to five Snap Inc.s or the gross domestic product of Egypt. The reason for the selloff was a raft of new regulations from Beijing aimed at curbing monopolies in big tech. Although Chinese regulators have said little about how harsh they expect the new rules to be, penalties could range from fines, to unwinding mergers and acquisitions, to even breaking up industry leaders. In many ways, Beijing is just now joining in on a global reckoning around big tech power. The U.S. and Europe have already launched investigations and lawsuits against companies like Amazon.com Inc. and Alphabet Inc. In China, targets could include the likes of Alibaba Group Holding Ltd., Tencent Holdings Ltd, and Jack Ma's Ant Group Co. The new rules will seek to root out anti-competitive behavior like sharing sensitive consumer data, forcing exclusivity with merchants on certain platforms and subsidizing services at below cost to eliminate smaller rivals. The country's fresh interest in antitrust amounted to a pile-on for Chinese tech companies this month, which have for years enjoyed broad freedom and state support for their break-neck growth. Just one week before the antitrust news, China announced another set of regulations covering internet finance. The moves triggered the shock suspension of Ant's $35 billion share sale, which would have been the largest initial public offering ever. China's tech giants are, indeed, extremely powerful. Many start with an already proven concept, often tested first in Silicon Valley. For example, Tencent's WeChat once looked a lot like WhatsApp, Weibo like Twitter, and Alibaba's Taobao like Ebay. Then, Chinese tech founders use their superior speed and knowledge of local markets to roll out the business in Asia. Next, there's a cash-burning price war to lure users with all sorts of subsidies and incentives. And the final step—after smaller rivals have been vanquished—is industry domination. (In between, these companies love to copy each other, too.) Even the venture capital market is largely controlled by a few big companies. The largest players act as VCs, grooming future generations of titans, and ensuring their companies won't be caught off guard by the upstarts. Alibaba and Tencent are now in too many businesses to count as they try to lock users into their respective ecosystems. Tencent is widely credited for pioneering the super-app model with WeChat, which lets users schmooze, shop, share cabs and more. As with much of the Chinese Communist Party's decision-making, the exact reason for the latest crackdown is hard to discern. The moves could be an attempt to grapple with a few companies' growing power and foster innovation. President Xi Jinping's government has urged more development in areas like semiconductors, 5G and artificial intelligence. The urgency for those projects has become more acute as the U.S.-China trade wars have intensified. There's also a possibility that the might of the tech players was seen as competitive to government control, and the moves are designed to bring the industry to heel before it grows even larger. Unfortunately, as China's most valuable corporations plead their case, any political tussling will happen behind the scenes. Unlike in the U.S. which will trot tech executives out before Congress again on Tuesday, we won't be able to see Jack Ma being grilled by lawmakers at the National People's Congress. —Zheping Huang | 
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