Platform firms poised to better serve real economy

Development amid regulation

Supporting the healthy development of platform companies doesn't mean a lack of regulation. In late December, China National Knowledge Infrastructure, the country's largest online academic database platform, was fined 87.6 million yuan ($12.72 million) for monopolistic behavior.

According to the State Administration for Market Regulation, since 2014, CNKI had abused its dominant market position to sell its database services at increasingly higher prices. The company had also restricted academic journals' and universities' ability to authorize the use of data by third parties through the signing of exclusive cooperation agreements.

Despite the already high fees for its services, CNKI had continued to increase its prices, with an annual average increase of about 10 percent seen for years. According to the penalty notice issued by the regulator, CNKI owned more than 95 percent of published Chinese academic papers, accounting for 90 percent of universities nationwide.

"The latest antitrust efforts on CNKI showed that China's antimonopoly efforts are getting normalized, under which the country aims to ultimately drive the development of various industries through proper regulation," said Zhong Gang, executive director of the Competition Law Research Institute at the East China University of Political Science and Law.

"The move will promote the free flow and dissemination of academic resources, reduce the cost of knowledge acquisition for consumers, and finally drive the fair and sound development of related markets," he said.

While supporting the digital economy, the Central Economic Work Conference also emphasized that the country will continue to improve the level of "normalized supervision", which, according to Wang Xianlin, a member of the expert advisory group of the State Council's antimonopoly commission, is aimed at creating a more predictable business environment.

"This means that the country will avoid sudden, intensive and special rectifications of improper behavior in platform economy in the future, which will be another firm support for platform companies to develop," Wang said.

A report by Sealand Securities said that given the importance of data elements and the important role of platform economy in employment and ensuring market supply, the upcoming policy is expected to be "more stable". And the next stage of supervision will set a clearer red line for platform companies, with the aim of promoting their development in a reasonable and legal manner, it said.

Zhu Keli, founding director of the China Institute of New Economy, said that a group of green light investment cases are likely to be announced soon, and detailed policies and measures to support the standardized and healthy development of platform economy are expected to be unveiled this year.

Green lights are mainly given to tech and internet investment deals, and those that can help boost the development of the real economy, Zhu said.