Coming from the Chinese government which is currently preparing for the 19th CPC National Congress another news that has surprised no-one: According to a report from Wall Street Journal quoting unnamed sources, the party is planning to take a stake in Tencent, Sina Weibo, and Alibaba’s Youku Tudou which will enable it to appoint government officials to the companies’ boards and influence their operations. The 1% stake called “special management shares” is already being trialed in two media startups, Yidian Zixun and Beijing Tiexue Tech, which operates a patriotic media website.

According to WSJ, the decision could mean that the Chinese government would have easier access to troves of data held by local tech companies covering social media, transportation, finance, medical, and more.

Certain companies believe that the plan will fail because of potential shareholder litigation and the high cost of stock ownership. According to recent data, Tencent’s share price fell after the report was published. Some commentators have pointed out that the market could see this news as a positive because party ownership in these firms will mean regulatory risks will be reduced. However, it might cause them problems in Western markets.

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

What you get

Full access to all premium content and our full archives

Members'-only newsletters

Preferential access and discounts to all TechNode events

Direct access to the TechNode newsroom

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

Masha Borak

Masha Borak is a technology reporter based in Beijing. Write to her at masha.borak [at] technode.com. Pitches with the word "disruptive" will be ignored. Read a good book - learn some more adjectives.