The Chinese government has taken stakes in Chinese entities owned by tech companies ByteDance and Sina Weibo, tightening its grip on its technology sector.
WangTouZhongWen (Beijing) Technology, co-owned by three Chinese state entities including an investment fund backed by China’s internet watchdog, has taken one per cent of stake in Beijing ByteDance Technology, according to China’s National Enterprise Credit Information Publicity System.
The stake also gives the government a board seat in Beijing ByteDance, which holds some business licenses covering popular domestic apps Douyin and Toutiao, reported Reuters by quoting a source familiar with the matter.
However, Beijing does not take any stake in ByteDance owned Tiktok, as the international popular video app is unavailable in China, the news report added.
An affiliate, WangTouTongDa (Beijing) Technology, similarly holds 1 per cent of stake in Beijing Weimeng Technology, Sina Weibo’s main domestic subsidiary, according to a government data report and filings summited to the US Securities and Exchange Commission (SEC).
WangTouTongDa is fully owned by the China Internet Investment Fund established by China’s finance ministry and the Cyberspace Administration of China.
In an SEC filing, Weibo said its subsidiary received the investment from WangTouTongDa in April 2020. The move allowed WangTouTongDa to appoint a director to Weiming’s three-member board.
China continues its regulatory crackdown on the technology sector as the state market regulator issued draft rules to tackle unfair internet competition and regulate companies’ use of critical data.