Hearing some poor and lazy conspiracy theories from both buy and sell side around the Chinese internet regulatory announcement.

Many are conflating recent events - Ant IPO withdrawal with this internet regulation, when in reality these are very likely completely unrelated.

Some are even saying that China may want to lead the world in shaping internet regulation?!

Most should know by now that regulation is not something where global leadership brings any benefits, if anything what we've seen is the opposite

Too much regulation is more likely to stifle innovation and entrench incumbents - one of the key lessons from GDPR and other regulatory failures

Go review your Ben Thompson

Based on the recent 5 year plan you will know that innovation and technology is much much more important than regulation.

Instead, what China needs is to leverage its internet giants to keep Chinese consumer spend on the mainland and boost domestic GDP growth

In reality, the timing of the internet regulation has more to do with singles day than anything else and I don't think we will hear much more about it once singles day has passed.

The reason the gov came out with this now has nothing to do with Jack and everything to do with the fact that singles day (week) is when you see the most fierce competition between platforms in terms of locking up exclusive deals with merchants etc.

Thats where the gov has more pressure from merchants to offer them some help and protection (even though gov doesn’t actually care about this in my view)

But Chinese gov always needs to give the IMAGE that they are looking out for the small guy - THIS IS KEY

Chinese gov knows that any excessive regulatory action would most likely backfire and make the country increasingly un-investable - and that also goes against everything the Gov wants to accomplish.

If you want to know why this is the case, go read "Clash of Empires" by Gavekal https://www.amazon.com/dp/9889975297/ref=cm_sw_r_tw_dp_x_Vp8QFb1662JBM

The first few Alibaba CMDs were much smaller and cozier affairs than they are now but they also coincided with periods of gov scrutiny. At that time Baidu was getting hit hard and every third question was about government control and interference.

I remember Jack told one investor that Alibaba had received 24,000 government offical visits in one year.

That was 5-6 years ago.

He said, "you can close Baidu for 2 weeks but you can't close Taobao for even 2 hours".