Scandals in China call for more regulation for technology companies

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Many Americans have asked if big tech companies are too powerful, and it turns out people in China are asking a similar question. Just like in the United States, technology companies in China are essential to economic growth. But in China, recent scandals have changed history. This is Emily Feng from NPR.

EMILY FENG, BYLINE: The January weather in Beijing regularly drops to minus degrees. That doesn’t stop dozens of angry landlords from queuing outside this Beijing office every day. Here is one of them.

UNIDENTIFIED OWNER No. 1: (through interpreter) We are at the end of our rope on this matter between landlords and tenants.

FENG: These landlords are in front of the offices of Danke, one of the largest rental startups in China. It rented more than 400,000 apartments, mostly in the Beijing area. Thank you is aimed at young tenants looking for cheap digs. It even gave them online loans if they couldn’t prepay their rent. But this winter Thank You went broke. It cost rent, but the landlords no longer paid who then vacated their tenants. Here is another landlord. They wanted to remain nameless because they are still asking thank you for money.

UNIDENTIFIED HOST # 2: (through interpreter) To be honest, the state has done a bad job regulating it and thank you has pushed this rent dispute on our shoulders.

FENG: Allen Wang moved to Shenzhen Technology Center after graduating from college. When Danke went broke, his landlord confronted him in front of the apartment.

ALLEN WANG: (through interpreter) The guy she brought was a locksmith. This was the first time we met the landlord.

FENG: You could compromise that day, but Wang had to move out early and lost almost a year of rent – and his naivete.

WANG: (through interpreter) I now have a much deeper understanding of capitalism. The evils of capitalism, the disorderly growth of these businesses, are costly to ordinary people.

FENG: Dissatisfaction with China’s rampant version of capitalism is also why many support regulatory measures against the Ant Group. Ant is led by China’s most famous entrepreneur, Jack Ma, and has grown into one of the most powerful financial companies in the world. It processes trillions of dollars in online payments annually. It contains huge amounts of consumer data. This led to allegations that competitors had been ousted and consumers had been given predatory loans.

Ant was set to go public in Hong Kong and Shanghai last November and become the world’s largest public offering ever. Until…


UNIDENTIFIED REPORTER: All of that seems to go up in smoke this morning.

FENG: Ant’s listing has been postponed indefinitely. As of this month, Jack Ma’s other company, Alibaba, has been on an antimonopoly investigation. And while it costs money for mom and dad investors, many people in China went online to express their support for regulators rather than Alibaba.

XU QINGDUO: I hope they can learn to compromise or find a balance between profit making and caring for their employees.

FENG: Xu Qingduo is a Beijing-based political analyst. He says a number of other e-commerce scandals have fueled social discontent. Those scandals include a delivery man who works for an Alibaba company that set himself on fire this month to protest unpaid wages.

XU: There are labor laws in place to protect the interests of deliverers, but it seems to be lacking in real life.

FENG: In January of this year, an employee at Pinduoduo, a Chinese e-commerce startup, suddenly fell dead after working 380 hours a month. Her death and the uncompromising attitude of the company caused a public uproar.


UNIDENTIFIED PERSON: (Non-English language spoken).

FENG: This is another Pinduoduo employee who was laid off after criticizing the company’s working conditions online. Like many employees, he says they have to work at least 300 hours a month.


UNIDENTIFIED PERSON: (Non-English language spoken).

FENG: It’s an extreme version of 996, the Chinese term for 9 to 9 work, six days a week. It’s a common schedule in tech companies, with an increasing number of young college graduates and migrant workers.

Suji Yan is himself the founder of a tech start-up. He is also committed to decent working conditions in technology. Two decades ago, factories producing smartphones and textiles had the worst working conditions. But now it’s technology companies.

SUJI YAN: People actually realize that it isn’t just about factory workers. It will actually have to do with everyone.

FENG: Everyone, which means that it’s the time of the tech industry’s reckoning in China too.

Emily Feng, NPR News, Beijing.

(SOUNDBITE OF PHILANTHROPE’S “RELIEF”) Transcript provided by NPR, Copyright NPR.

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