Introduction
The increasing economic power and political influence of a few dominant technology companies have sparked a global trend toward stricter regulation. Since 2019, major regions such as the European Union (EU) and United States have significantly strengthened their oversight of digital platforms.Footnote 1 The EU has conducted numerous antitrust actions, integrating privacy protection, platform rule transparency, and data security into its regulatory framework. Similarly, the United States has launched substantial antitrust investigations against major technology firms, which reflects a shift toward stricter regulation of these platforms.Footnote 2
China, a latecomer to this regulatory arena, has implemented some of the most stringent measures. Digital platforms have been crucial in driving China’s economic growth. The crudely defined “digital economy” contributed approximately three-quarters of GDP growth between 2001 and 2018.Footnote 3 By 2019, five of the world’s ten largest Internet firms by market capitalization came from China.Footnote 4 While this growth was facilitated by substantial government support, China’s regulatory approach shifted significantly between late 2020 and mid-2022. Beginning with the Ant Group’s suspended initial public offering (IPO) in late 2020, the Chinese government shifted dramatically from a previously lenient stance to strict intervention in the platform economy. Regulatory agencies implemented wide-ranging measures, such as antitrust, data security, and financial regulations. These actions affected almost all of China’s large technology companies, wiping out more than $1 trillion in global market value from Chinese tech giants before a regulatory pause in mid-2022.Footnote 5
This shift marked a turning point in the governance of China’s tech sector, characterized by increased regulatory control. Scholars and the media have described this period as a “tech crackdown” or “regulatory storm.”Footnote 6 Given China’s prominence as one of the three largest “digital empires” globally,Footnote 7 understanding the rationale and methods behind this transformation is critical for comprehending the unique characteristics of China’s regulatory model and its implications for global digital governance.
While much scholarship has focused on the external factors driving China’s regulatory shift—such as unchecked corporate growth, the Chinese Communist Party’s (CCP) promotion of “common prosperity,” and ongoing U.S.–China geopolitical rivalry—it has often neglected internal dynamics. In particular, the role of bureaucratic restructuring has not been fully explored. Bureaucratic structure critically impacts regulatory outcomes by influencing power distribution, priority setting, and enforcement mechanisms.Footnote 8 Analyzing internal institutional changes is particularly important to explain China’s regulatory shift. In contrast to the American market-driven regulatory model and the EU’s rights-driven regulatory model, China’s platform regulatory model has been described as a state-driven regulatory model.Footnote 9 While these cross-country comparisons have pointed to the central role played by the state in China’s platform development, they have paid little attention to the mechanisms of China’s state-driven regulatory model and the evolution of China’s regulation of platform economy. Although a few studies on bureaucratic politics of China have offered valuable insights into interagency fragmentation and the regulatory overreach characteristic of the 2020–2022 transition, they have also overlooked the structural shifts within regulatory bodies themselves.Footnote 10
This paper examines an understudied institutional mechanism driving regulatory change. It aims to explore the following research question: How did internal bureaucratic restructuring facilitate regulatory transformation in China’s digital platform sector? It argues that the 2018 institutional reforms laid the foundation for intensified regulatory oversight through “domain-specific centralization.” By consolidating regulatory authority within fewer agencies overseeing key domains—such as finance, antitrust, and data security—the reforms reduced overlaps and gaps, consequently enabling the state to exert more direct control over major digital platforms.
Specifically, the March 2018 institutional reform introduced substantial changes to China’s regulatory framework. This restructuring granted the People’s Bank of China (PBOC) greater authority over financial stability, centralized antitrust enforcement under the State Administration for Market Regulation (SAMR), and enhanced the Cyberspace Administration of China (CAC) as a party–state body overseeing data security. This centralization resulted in a more coherent and robust regulatory framework within these key digital domains, paving the way for intensified regulatory oversight of platform companies between 2020 and 2022.
Through case studies of Ant Group’s suspended IPO, Alibaba’s record antitrust fine, and Didi’s data security investigation, this paper demonstrates how domain-specific centralization facilitated stricter enforcement. At the same time, variations in centralization across domains resulted in divergent outcomes. The low centralization in financial regulation led to abrupt interventions, as seen in Ant’s IPO suspension. In contrast, with its moderate centralization, antitrust regulation demonstrated the most rule-based and transparent enforcement in the case of Alibaba. Meanwhile, the high centralization in the data security domain allowed for swift but sometimes arbitrary actions, exemplified by the investigation into Didi.
This paper contributes to the study of the regulatory governance of digital platforms in China in three ways. First, in contrast to prior studies that have concentrated on centralization between central and local governments,Footnote 11 this paper emphasizes centralization among central regulatory agencies. This perspective provides new insights into the structural mechanisms behind China’s regulatory shift in 2020–2022. Second, by examining domain-specific centralization, the paper differentiates between China’s regulatory framework and Western approaches, laying the foundation for a comparative study with EU and U.S. regulatory models. Finally, by showing how the state controls platforms to align with national policy objectives, this study contributes to a deeper understanding of the evolving relationship between the state and digital platforms in China’s rapidly digitizing economy.
The remainder of this paper is organized as follows. The next section reviews the literature on regulatory shifts within China’s digital platform sector. Section 3 presents the analytical framework underpinning this study. Section 4 details the 2018 institutional reforms and restructuring of regulatory agencies in finance, antitrust, and data security. Section 5 examines the case studies of Ant Group, Alibaba, and Didi, analyzing how centralized regulatory authority enabled intensified enforcement. The final section concludes the findings and proposes the implications of this paper.
Literature review
The regulatory shift in China’s digital platform sector has attracted considerable attention from academics and the media, which has predominantly centered around the motivations behind China’s tightening grip on rapidly expanding tech companies. The existing scholarship and public discourse have mainly attributed this shift to external factors, such as the unchecked growth of tech giants, the CCP’s push for “common prosperity,” and the U.S.–China geopolitical rivalry. These studies provide a foundational understanding but are limited in their focus on external pressures, often overlooking the internal dynamics within China’s regulatory apparatus.
Most existing studies and public discussions have identified the unchecked expansion of China’s tech giants as a central driver of regulatory action. The rapid growth of big tech firms has given these companies enormous economic and social power as well as negative impacts, such as monopolistic practices, data privacy issues, and labor exploitation. Scholars in China have argued that tightened regulation aims to curb these negative impacts and promote a healthier development of the platform economy.Footnote 12 They note that this regulatory approach is consistent with broader global efforts to address the challenges posed by tech giants.Footnote 13
Other scholars have agreed that the growth of tech giants is a crucial motivator but that the regulatory shift is not merely economic; it is also a political move to reinforce CCP control over the sector. Private tech firms, while instrumental to China’s economic rise, threaten the Party’s political monopoly.Footnote 14 They suggest that the timing of the regulatory shift ahead of the 20th Party Congress reflects the Party’s intent to solidify public support by reasserting its authority over powerful business entities.Footnote 15
The CCP’s “common prosperity” agenda has introduced an ideological dimension to these regulatory changes, aiming to reduce inequality and bolster legitimacy by addressing the unchecked capital expansion within private tech firms. Domestic scholars and media have framed these efforts as steps toward promoting fairness, national security, and industrial autonomy.Footnote 16 Conversely, some Western scholars have viewed this shift as evidence of China’s ideological pivot from a capitalist to a more state-directed model.Footnote 17 Under this perspective, tech firms are cast as scapegoats for widening inequality.Footnote 18
In addition to these domestic factors, several studies have emphasized the influence of the U.S.–China rivalry on China’s regulatory transition. U.S.–China competition has heightened national security concerns, prompting China to pursue technological self-sufficiency. Geopolitical tensions have also raised doubts about the national loyalty of tech firms with global financial connections.Footnote 19 As a result, China has shifted its focus from consumer-oriented Internet firms to strategically essential hard technologies, such as semiconductors, batteries, and biotechnology. This shift reflects China’s strategic prioritization of areas crucial for long-term economic and security interests.Footnote 20
While this body of research highlights external catalysts, a gap remains in analyzing the internal bureaucratic changes reshaping regulatory enforcement. In Digital Empires, Anu Bradford compares the regulatory models of three dominant digital powers: the United States, EU, and China.Footnote 21 She argues that China’s regulatory model is distinct from the American market-driven regulatory model and rights-driven regulatory model of the European Union, characterized by a state-driven approach emphasizing the state’s control and utilization of platform firms. While Bradford underscores the centrality of the state in China’s digital economy, she stops short of detailing the mechanisms and evolution of China’s regulatory model.
Recent research has begun to examine how the regulatory crackdown unfolded, finding that China’s regulatory actions were unusually swift and intense compared to those in Western countries. Some studies attribute the regulatory overreach to the change in the highest leadership’s stance toward digital platforms and limited constraints on executive power; they argue that once leaders decide to act, regulation follows swiftly.Footnote 22 Others focus on interagency fragmentation, stating that “turf wars” among fragmented regulatory agencies resulted in a campaign-style governance approach.Footnote 23 Angela Zhang’s “dynamic pyramid model” offers insights into this instability, illustrating how China’s regulatory agencies vacillate between overreach and inaction in response to cues from top leadership.Footnote 24
While these studies shed light on political intent and regulatory behavior, they nevertheless overlook the structural shifts within regulatory bodies themselves. They also do not explain why the leadership’s intentions produced different regulatory outcomes across domains. For example, in the case of platform labor regulation—where structural fragmentation persisted—policy signals failed to translate into meaningful enforcement.Footnote 25 This highlights the importance of internal bureaucratic structure in shaping regulatory outcomes.
This study addresses these gaps by examining how internal institutional changes—specifically, domain-specific centralization—have reinforced regulatory cohesion and effectiveness. By focusing on these structural shifts within regulatory bodies, it offers a fresh perspective on the motivations and methods behind China’s recent regulatory turn, supplementing existing research with an analysis of the bureaucratic dynamics underpinning regulatory enforcement.
Analytical framework
Domain-specific centralization
This paper argues that domain-specific centralization provided the institutional foundation that enabled regulatory transformation in China’s digital platform sector. Bureaucratic structure is essential to understanding policy outcomes in China.Footnote 26 Bureaucracies can be categorized as fragmented or centralized depending on internal power distribution. Fragmentation refers to the dispersion of authority across multiple agencies, while centralization consolidates regulatory power within one or a few agencies. Centralization can be measured through three key factors: the number of agencies governing the same domain, the degree of decision-making autonomy, and the nature of party–government relations. The number of agencies involved in a domain corresponds to the number of veto players whose consensus is required for policy implementation.Footnote 27 Decision-making autonomy reflects the extent to which an agency operates independently from the rules of its higher departments or the broader bureaucratic network.Footnote 28 Additionally, the Party’s dominance within China’s political system means that strong party intervention often results in greater centralization by consolidating decision-making under Party leadership.Footnote 29 Thus, fewer veto players, higher decision independence, and closer party–government ties indicate a higher degree of bureaucratic centralization within a given domain.Footnote 30
The institutional reforms in 2018 illustrate a shift from bureaucratic fragmentation to centralization within specific domains. In the post-Mao era, China’s bureaucracy has been characterized by “fragmented authoritarianism,” in which policy outcomes result from negotiations among agencies with overlapping mandates.Footnote 31 Fragmentation fostered competition among agencies and led to regulatory gaps or policy incoherence.Footnote 32 Specifically, regulators often competed to control lucrative regulatory areas, leading to rent-seeking and undermined regulatory efficiency. However, regulatory agencies would pass the buck to each other for complex or sensitive issues, creating gaps that allowed firms to exploit inconsistencies between regulators or engage in regulatory arbitrage.Footnote 33 Such institutional design diluted regulatory oversight and often hampered the central government’s ability to ensure uniform regulation over the Internet sector, which demands cohesive policy execution owing to its scale and nationwide impact.Footnote 34
Following the 2018 reforms, however, a shift toward domain-specific centralization emerged. Domain-specific centralization refers to the concentration of regulatory power within a specific domain, where one or a few key agencies are empowered to oversee all activities only within that domain. In the 2018 restructuring, the Chinese government did not centralize all platform-related regulatory functions into a single super-agency. Instead, it reallocated and consolidated regulatory power within fewer agencies overseeing key areas of the digital economy.
The 2018 institutional reforms reduced agency overlap by establishing “super ministries” or merging Party and state functions to streamline bureaucracy. This restructuring addressed regulatory gaps caused by fragmented authority and conflicting mandates among regulators, with a focus on “making the bureaucratic machine more efficient and disciplined.”Footnote 35 By consolidating power within specialized regulatory bodies, the state increased its ability to impose fines, uniformly enforce regulations, and prevent tech giants from exploiting interagency divisions for regulatory evasion.Footnote 36
However, domain-specific centralization has inherent limitations. First, this form of centralization remains confined to specific domains. While it improves intra-domain coherence and regulatory capacity, it does not fully eliminate the structural problems associated with bureaucratic compartmentalization. Interagency competition persists, with regulators fighting over the prioritization of regulatory priorities.Footnote 37 This competition, combined with the increased enforcement powers brought by centralization, has sometimes resulted in over-regulation. The simultaneous regulatory actions across multiple sectors from 2020 to 2022 exemplify this dynamic.Footnote 38 Furthermore, unlike independent regulators common in the West,Footnote 39 Chinese regulators remain subject to top-down political influence.Footnote 40 Centralization enhances their responsiveness to central leadership priorities, enabling the party–state to address crucial challenges with direct, assertive interventions.
Methods and case selection
This paper draws on a comprehensive range of sources, including institutional reform plans issued by the CCP Central Committee and State Council (2003–2023), agency reports, media coverage, and filings from major platform companies. Additionally, interviews with Chinese scholars supplement the data. Cross-referencing these multiple sources ensures the validity and reliability of the findings.
This study employs process tracing and comparative case studies to examine how domain-specific centralization following the 2018 reforms influenced regulatory enforcement during the 2020–2022 tech crackdown.Footnote 41 The process-tracing method is used to analyze the evolution of domain-specific centralization across three key regulatory domains—finance, antitrust, and data governance—and its impact on varied regulatory outcomes in representative cases, including Ant Group’s suspended IPO, Alibaba’s antitrust fine, and Didi’s data security investigation. By focusing on the differing processes of centralization in these domains, measured against three specific criteria, this paper first assesses the level of centralization in each domain. The findings from process tracing in these regulatory domains serve as a baseline for a comparative case study that evaluates how the degree of centralization within each regulatory agency influenced the outcomes of the respective cases. This comparative case study further validates the concept of domain-specific centralization.
Cases are selected for three main reasons. First, the finance, antitrust, and data security domains share a surge in enforcement intensity between 2020 and 2022, yet they vary in the degree of centralization following the 2018 reforms. These variations offer a valuable opportunity to analyze how different levels of centralization shaped enforcement outcomes. In finance, the merger of the China Banking and Insurance Regulatory Commission (CBIRC) reduced agency overlap, and the PBOC gained greater decision-making autonomy. However, sector-based regulation limited the degree of centralization in the financial regulatory domain. In contrast, the consolidation of three agencies into a single entity under the SAMR enhanced centralization in antitrust regulation, though decision-making autonomy remained moderate. Data security achieved the highest level of centralization, driven by tightly integrated party–state relations and the CAC becoming the sole veto player post-2018 reforms. Table 1 summarizes these centralization trends.
Table 1. Centralization in financial, antitrust, and data security regulation: before and after 2018
Notes: The 2018 reforms streamlined the financial regulatory domain by merging the CBRC and CIRC into the CBIRC, reducing the number of agencies from four to three, with the FSDC serving as the coordinator. In antitrust regulation, authority consolidated from three agencies into one under the SAMR, increasing decision-making autonomy from low to medium. In the data security domain, the CAC previously operated under the influence of other ministries, but its 2018 upgrade established it as the central authority for data-security regulation.
Second, these domains represent the most substantial regulatory impacts on tech companies during the tech crackdown, exemplified by the cases of Ant Group, Alibaba, and Didi.Footnote 42 Fintech regulation, antitrust enforcement, and data security oversight were the main tools regulators employed to target tech firms.Footnote 43 Ant Group’s suspended IPO, which was known as the beginning of the regulatory storm, reflected a considerable change in China’s financial regulatory framework. Moreover, Alibaba’s antitrust fine was the first antitrust action against a large Internet platform and the largest fine imposed under the Anti-Monopoly Law (AML).Footnote 44 Similarly, Didi’s data security investigation, the first cybersecurity probe targeting a digital platform, underscored heightened scrutiny of data security and initiated broader cybersecurity reviews of other tech firms.Footnote 45 These cases reveal China’s rationale and methods in this regulatory shift.
Third, these domains are central to global debates on regulating powerful tech platforms. Governments worldwide face challenges such as financial risks, market monopolization, and data privacy violations caused by large tech companies. While no universal consensus exists on regulatory strategies, fintech, antitrust, and data security are the focus of increased regulation.Footnote 46 Examining these domains provides insights into China’s regulatory model and lays a foundation for comparative analyses with other national approaches.
The 2018 institutional reforms and the restructuring of regulatory agencies
The 2018 institutional reforms
Since 1982, China has undertaken institutional reforms every five years to streamline its administrative apparatus, primarily by reducing personnel and consolidating agencies.Footnote 47 Beginning in 2008, the government introduced the “super ministry” model, merging agencies with overlapping functions to improve efficiency and clarify responsibilities.Footnote 48 However, despite these efforts, the reforms that occurred before 2018 were primarily administrative in nature and did not alter the deeper institutional configuration of regulatory power. As a result, they failed to resolve the fragmented bureaucratic structures that continued to undermine regulatory coherence.Footnote 49
In contrast, the 2018 reforms marked a turning point in China’s bureaucratic restructuring. On 21 March 2018, the Central Committee of the CCP launched the “Plan on Deepening Reform of Party and State Institutions” (深化党和国家机构方案). Unlike previous efforts, the 2018 reforms were comprehensive, extending beyond government agencies to restructure the Party, the National People’s Congress, the military, and local institutions. This ambitious overhaul impacted over eighty central and state departments, representing the most substantial reform in scale and depth since the beginning of the reform and opening up.Footnote 50
Two critical structural shifts emerged from the 2018 reforms. First, the functions of state institutions were restructured to enhance operational efficiency. The 2018 reforms continued the “super ministry” model adopted in 2008, creating fewer super ministries, further reducing redundant functions, and fostering coordination within the ministerial bureaucracy. With the reorganization of eight ministerial-level and seven vice-ministerial-level agencies, the State Council streamlined its structure to 26 organs.Footnote 51 This restructuring also established powerful new regulators, such as the SAMR and CBIRC, to improve oversight in key economic sectors.Footnote 52
The second major shift was a trend toward merging Party and state functions that strengthened the Party’s leadership over government processes. While reforms in the 1980s aimed to separate Party and state functions to foster administrative autonomy and professionalism,Footnote 53 the 2018 reforms reversed this approach. With the CCP taking the lead in the restructuring of state functions, it began selectively integrating party and government institutions. Consequently, since 2018, many of China’s top governing bodies have operated under dual identities—formally designated as both CCP organs and state institutions, often bearing different names, but functioning as the same organizational entity.Footnote 54 This institutional merger has effectively embedded the Party within the state apparatus, enabling the CCP to directly enact its will through regulatory bodies whenever necessary. Prior to 2018, the severed structure of the Party–state often hindered the immediate and effective translation of Party directives into regulatory action. In contrast, the post-2018 institutional arrangements have facilitated more rapid and responsive regulatory shifts in domains where this integrated structure has been established.
Together, these structural changes created a more centralized and politically embedded regulatory system that laid the institutional foundation for the 2020–2022 regulatory shift.
Centralization in three regulatory domains
The 2018 institutional reforms marked a turning point in China’s regulatory framework, centralizing finance, antitrust, and data-governance regulations. Before 2018, fragmented regulation led to inefficiencies and regulatory gaps in these domains. The reforms strengthened the PBOC’s leading role in maintaining financial stability and consolidated antitrust regulation under the SAMR. In data governance, the CAC was elevated to a supra-ministerial regulator under the CCP, achieving the highest degree of centralization among the three domains. This variation in centralization may reflect the perceived strategic importance of each domain to the Party–state. As Hsueh argues, the degree of central government control over a sector corresponds to its national significance.Footnote 55
Financial regulatory framework
The fintech regulatory framework operates within the broader financial regulatory structure.Footnote 56 The 2018 institutional reforms merged the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC) into the CBIRC, while transferring the power to draft major legal frameworks and prudential regulatory policies to the PBOC. This shift enhanced regulatory coordination in the financial domain, consolidated the PBOC’s leadership in maintaining financial stability, and laid an institutional foundation for reinforcing fintech regulation.
China had operated under a “central bank + three commissions (一行三会)” system since 2003. The PBOC managed monetary policy and critical regulatory functions. Moreover, three commissions regulated a distinct financial sector: the CBRC supervised banks; the CIRC governed insurance companies, and the China Securities Regulatory Commission (CSRC) oversaw the stock. These commissions regulated and issued directives.Footnote 57 The sector-based framework reflected characteristics of fragmented authoritarianism, which led to overlapping supervision and regulatory gaps. Additionally, the different interests and positions of various sectors led to inconsistent attitudes in policy. For example, while the PBOC actively promoted interest rate reforms, other financial regulators adopted cautious or oppositional stances.Footnote 58
The rise of fintech has exacerbated the problems caused by bureaucratic fragmentation in the financial regulatory domain. Early on, regulatory ambiguities allowed for lax oversight in areas such as peer-to-peer (P2P) lending and shadow banking, which later caused substantial economic and social issues.Footnote 59 For example, Ezubao, once a major P2P platform, defrauded over 900,000 users of nearly 50 billion yuan ($7.65 billion), sparking nationwide protests that threatened social stability.Footnote 60 In response to rising financial risks, the central government prioritized strengthening financial regulation at the Fifth National Financial Work Conference in 2017. The new rules aimed to incorporate non-financial firms engaging in financial activities under the same regulatory framework as financial enterprises.Footnote 61 To further streamline regulatory coordination and enhance systemic risk management, the Financial Stability and Development Committee (FSDC) was established within the existing framework, chaired by Vice Premier Liu He, to coordinate between the main central and Party bodies.Footnote 62
After the 2018 institutional reforms, veto players in the financial regulatory domain decreased from four to three, with the FSDC as the coordinator. Fintech firms were increasingly subject to tightened oversight.Footnote 63 The FSDC’s remit expanded to address contagion risks spanning agencies, markets, and domains, shifting focus to assessing the roles of tech giants in potential systemic risks.Footnote 64 Further, the reforms merged the CBRC and CIRC into the CBIRC. This restructuring refined the “one committee, one bank, two commissions (一委一行两会)” framework, where the committee oversees macro-financial stability, the PBOC manages monetary policy and macroprudential regulation, and the commissions conduct micro-level supervision of financial institutions’ behavior and functions.Footnote 65
The 2018 reforms also increased the PBOC’s decision-making autonomy, enhancing its leading role in maintaining financial stability.Footnote 66 The reforms transferred the responsibilities of the CBRC and CIRC to the PBOC for formulating drafts of important laws and regulations for the banking and insurance sectors.Footnote 67 The appointment of Guo Shuqing as both CBIRC Chairman and PBOC Party Secretary marked a crucial step toward enhancing coordination between the two banking regulators.Footnote 68 Despite the Party’s dominant leadership and supervisory role in the financial sector, financial regulators were affiliated with the State Council and based on professional judgment rather than direct Party intervention during the implementation process. The new structure improved regulatory efficiency through more apparent roles and reduced gaps and overlaps in the previous regulatory framework. The central bank’s prudent attitude toward tech finance has become the main tone. The 2018 institutional restructuring thus laid the groundwork for strengthened regulation in tech finance.
However, sector-based regulation, compared to antitrust and data regulation, continues to limit centralization in the financial regulatory domain. Even after the 2018 reforms, three veto players remained, and the PBOC’s decisions on fintech regulation were still influenced by other agencies both within and outside the financial regulatory domain. Moreover, party–state relations in this domain remained separate compared to the tighter integration seen in data governance. While centralization improved following the 2018 reforms, conflicts among financial regulators persisted. These unresolved tensions led to abrupt and uncoordinated interventions, as exemplified by the abrupt suspension of Ant Group’s IPO in 2020.
Antitrust regulatory framework
China’s antitrust framework operates on two levels. The Anti-Monopoly Committee of the State Council (AMC) oversees the coordination and organization of anti-monopoly efforts, while enforcement agencies are responsible for implementing the AML.Footnote 69 Before the 2018 reforms, antitrust responsibilities were divided among three agencies. Among them, the National Development and Reform Commission (NDRC) was responsible for price monopoly cases; the Ministry of Commerce (MOFCOM) managed merger reviews, and the State Administration for Industry and Commerce (SAIC) oversaw the enforcement of monopolistic agreements and abuse of market dominance.Footnote 70 Unlike independent antitrust bodies in other nations, these agencies operated within large ministries subject to internal departmental rules and a broader bureaucratic structure across China.Footnote 71
This fragmented setup complicated enforcement, with overlapping responsibilities leading to interagency competition and lengthy review processes. For example, MOFCOM’s merger review process often required consultations with other departments, resulting in delays.Footnote 72 Resource limitations further hampered effective enforcement, leading agencies such as the NDRC to focus on high-profile cases involving multinational corporations. This fragmented system of antitrust enforcement was inefficient and costly.Footnote 73
However, the 2018 institutional reforms consolidated these into a single regulatory entity under the newly established SAMR. This reorganization sought to create a more centralized and disciplined regulatory structure under SAMR, with the Anti-Monopoly Bureau assuming primary responsibility for policy development, law enforcement, and international cooperation.Footnote 74 The SAIC emerged as the “winner” of this reform, with its leadership taking on key roles within SAMR. The SAIC-led personnel restructuring makes the merged antitrust agency more “legalized” and professional, while the former SAIC was traditionally tasked with overseeing market activities and emphasized the importance of following rules and procedures in administrative enforcement.Footnote 75 Unlike its predecessors, SAMR has become proactive, as seen in landmark cases such as Alibaba, enhancing both regulatory oversight and discipline.
The 2018 institutional restructuring allowed to centralize regulation within the antitrust domain, contributing to strengthening antitrust enforcement. In particular, in November 2021, the State Council elevated the SAMR’s antitrust division to vice-ministerial rank by formally designating it as “State Anti-Monopoly Bureau (SAMB),” adding 25 percent more personnel in 2022.Footnote 76 Upgrading the administrative level and increasing staffing may provide more resources and further enhance the unity and authority of anti-monopoly enforcement work.
However, because the Anti-Monopoly Bureau remains under the jurisdiction of the SAMR, it cannot entirely escape the influence of its parent ministry and other central departments.Footnote 77 Despite becoming the sole veto player in the antitrust domain after the reforms, this bureaucratic structure still constrains its decision-making autonomy. Additionally, as part of the State Council, the Bureau’s party–state integration is less pronounced than that of the CAC. Consequently, while the degree of centralization in antitrust regulation is higher than that in financial regulation, it remains lower than that in data regulation.
Data regulatory framework
Data security regulation is the most centralized among three regulatory domains. The CAC leads this area as a dual party–state entity directly under the CCP’s Central Committee. The 2018 reforms elevated the Central Leading Group for Cybersecurity and Informatization (CLGCI) to the Central Cyberspace Affairs Commission (CCAC), enhancing the CAC’s authority over data governance.Footnote 78
Centralization in Internet governance began in 2014, mainly around content control. Early content regulation was fragmented, likened to a “Nine Dragons Run the Water” model, where responsibilities were dispersed across numerous agencies.Footnote 79 Even after the creation of the State Internet Information Office (predecessor to the CAC) in 2011, more than fifty entities were involved in Internet content regulation.Footnote 80 The establishment of the CAC in 2014, alongside Xi Jinping’s chairmanship of the CLGCI, sought to centralize cyberspace administration. Since then, the CAC has taken over several mandates related to cyber regulation.Footnote 81
However, despite the CAC becoming the primary authority for online content, it initially operated under the influence of other ministries, frequently encountering bureaucratic struggles with powerful ministries reluctant to give up control over cyberspace issues. Additionally, the CLGCI, as a leading group structure, was not designed for permanent oversight. Top-level officials met irregularly, and the CAC, acting as its secretariat, consistently lacked sufficient resources.Footnote 82
The 2018 reforms expanded the CAC’s role beyond content regulation to include data governance, and the CAC became the sole veto player in the data security domain. After the 2018 restructuring, the CAC was placed directly under the CCP’s Central Committee, tightening party–state integration. The CLGCI was upgraded to the CCAC, a central-level commission with the CAC as its executive body.Footnote 83 Compared to the CLGCI, which coordinated various ministries with weak bureaucratic authority, the CCAC became a more permanent and well-resourced body.Footnote 84 The CAC operates under the “a single institution with two nameplates” model, sharing personnel with the CCAC Office. Its mandate now includes cybersecurity, data security, and privacy regulation.Footnote 85
The CAC also enjoys greater decision-making autonomy than other regulatory bodies. Under the CCAC, the CAC depends less on personnel and resources borrowed from other ministries, reducing external influence and enhancing its independent authority.Footnote 86 With Xi Jinping chairing the CCAC, the CAC is closer to the top leaders and directly reflects their concerns.Footnote 87 The CAC has been deeply involved in promoting and drafting major data regulations, including the Cybersecurity Law (CSL), Data Security Law (DSL), and Personal Information Protection Law (PIPL).Footnote 88 The DSL and PIPL, enacted in 2021, further empowered the CAC by granting it oversight over data security and personal information protection and making its decisions final and unappealable.Footnote 89 These reforms position the CAC as China’s leading cyberspace authority, centralizing control over Internet regulation. As the CAC enjoys jurisdiction as a supra-ministerial regulator, foreign media often refer to it as China’s “Internet czars.”Footnote 90
Nevertheless, challenges remain. The high degree of centralization and the CAC’s status as an integrated Party–state institution raise concerns about the transparency of the CAC’s decision-making processes and accountability to the public. While the CAC functions like a regulatory agency, its dual role means it is not subject to the same legal transparency requirements as administrative bodies. This lack of procedural checks creates space for arbitrary enforcement. Unlike the abrupt interventions driven by fragmented authority in the Ant case, the Didi case reflects arbitrary action that stems from concentrated power and opaque decision-making. Such opacity can lead to decision-making that evades public scrutiny, creating uncertainty about how and why regulatory actions are taken.Footnote 91
Case studies: regulatory actions in the 2020–2022 transition
In this section, the paper presents an in-depth analysis of key cases that highlight the shift in regulatory intensity during the 2020–2022 tech crackdown. The case studies of Ant Group’s suspended IPO, Alibaba’s record antitrust fine, and Didi’s data security investigation illustrate how the post-2018 centralization of regulatory authority influenced enforcement outcomes and redefined the relationship between the state and digital platforms.
Ant group’s suspended IPO
In late 2020, the Chinese authorities suspended Ant Group’s plan to conduct the world’s largest IPO just before its launch. The sudden suspension of Ant’s IPO shocked the world and was seen as a turning point in China’s tightening of financial regulations and the start of a storm of tech regulation in 2020–2022.Footnote 92 However, this action was not entirely unexpected. China had already been increasing the regulatory scrutiny of fintech—particularly with rising tensions between Ant Group and the PBOC, which oversees financial system stability. The 2018 restructuring of financial regulators bolstered the PBOC’s authority and provided the institutional basis for halting the IPO.
Ant Group, spun off from Alibaba in 2014, is China’s largest fintech enterprise, offering services such as mobile payments, microfinance, and wealth management.Footnote 93 Scheduled for listing on the Hong Kong and Shanghai exchanges in November 2020, the IPO was projected to cement Ant’s position as a global financial leader, with an estimated market valuation of more than $310 billion.Footnote 94 However, just two days before the listing, regulators halted the IPO. A speech by Jack Ma, founder of Alibaba and Ant, at the Bund Financial Summit in Shanghai was the catalyst. On 24 October 2020, Ma publicly criticized China’s regulatory system, arguing that traditional financial regulations were ill-suited for Internet finance and stifled innovation. Within ten days, Ant’s IPO plans were suspended.Footnote 95
The rapid rise of fintech firms such as Ant was initially facilitated by state support for Internet finance and their exploitation of regulatory gaps. To encourage reform in the traditional financial sector, the Chinese government treated fintech firms as alternative financial players, granting licenses and approvals that enabled their expansion.Footnote 96 For example, in 2011, Alipay, Ant’s precursor, was among the first non-financial institutions to secure a license from the PBOC for electronic payments.Footnote 97 Alibaba also received approvals to operate banks in 2013, launch investment products such as Yu’e Bao, and establish online insurers.Footnote 98 Ant often leveraged a fragmented regulatory system in its subsequent development, with overlapping jurisdictions among China’s four financial regulators. By presenting itself as a “technology company” rather than a “financial institution,” Ant avoided many restrictions applied to traditional banks.Footnote 99
The 2018 regulatory restructuring, however, curtailed these opportunities. The merger of the CBRC and CIRC into the CBIRC reduced overlaps, while new responsibilities assigned to the PBOC enhanced its decision-making autonomy. The PBOC adopted a more cautious approach to fintech, prioritizing financial stability. In August 2019, the PBOC released its first three-year fintech development program (2019–2021), emphasizing prudent supervision and realizing the constant improvement of fintech in supporting the real economy.Footnote 100 These shifts constrained the space for firms such as Ant to exploit regulatory loopholes.
Despite these reforms, Ant’s IPO revealed the limitations of China’s financial regulatory centralization. The contrasting priorities of the CSRC and PBOC made the IPO suspension appear abrupt. The CSRC, eager to boost investor confidence amid worsening U.S.–China relations, fast-tracked Ant’s IPO approval in just two months.Footnote 101 In contrast, the PBOC remained wary of Ant’s lending operations, which posed risks to the state’s control over capital. Bank lending dominates China’s financial system, and Ant’s expansion into this domain threatened to undermine state-owned banks and expose the PBOC to substantial risks.Footnote 102 Even after Ant filed for its IPO, the PBOC issued new draft regulations in September 2020, requiring non-financial firms such as Ant to form financial holding companies under its supervision.Footnote 103 These measures signaled a more stringent regulatory environment for fintech.
Jack Ma’s speech at the Bund Financial Summit can be interpreted as a last-ditch effort to sway regulators amid this tightening environment.Footnote 104 However, the speech backfired, exacerbating tensions with the PBOC. The central bank publicly criticized Ant for systemic financial risks and regulatory arbitrage.Footnote 105 A week after Ma’s speech, an FSDC emergency meeting underscored the need for stricter fintech oversight, and the issue was escalated to Xi Jinping, who instructed the suspension of Ant’s IPO.Footnote 106 On 2 November 2020, regulators summoned Ant executives for questioning and introduced draft measures imposing stricter limits on online microfinance businesses.Footnote 107 The following day, the Shanghai Stock Exchange formally suspended Ant’s IPO, citing “changes to the financial technology regulatory environment.”Footnote 108
In summary, Ant Group’s IPO suspension illustrates the increasing centralization of financial regulation after the 2018 reforms. However, the abrupt nature of the suspension also highlights the enduring fragmentation in China’s financial regulatory framework. While the CSRC approved the IPO to advance market confidence, the PBOC’s opposition underscored unresolved tensions in the sector-based regulatory approach. As a commentator noted, better coordination among regulators before the IPO approval could have prevented this outcome.Footnote 109
Alibaba’s antitrust fine
Antitrust measures were also a focal point of China’s regulatory storm from 2020 to 2022, reflecting similar trends in the United States and EU. The Alibaba antitrust case exemplifies the shifting regulatory environment. Following the 2018 institutional reforms that consolidated three antitrust divisions into one under the SAMR, the agency’s decision-making autonomy increased, forming the foundation for Alibaba’s antitrust enforcement.
The antitrust penalty against Alibaba began China’s campaign against platform monopolies.Footnote 110 In December 2020, SAMR launched an investigation into Alibaba’s alleged monopolistic “choose one out of two” policy, which required merchants to sell exclusively on its platforms. On 10 April 2021, SAMR determined that Alibaba held a dominant position in China’s online retail market, ordered it to cease its illegal activities, and imposed a record fine of 18.2 billion yuan ($2.75 billion), equivalent to 4 percent of Alibaba’s 2019 domestic sales. Additionally, SAMR issued administrative guidance requiring Alibaba to overhaul its practices.Footnote 111 This case—the first antitrust action against an online retail platform both domestically and internationally—resulted in the highest fine imposed since China’s AML was enacted in 2008.Footnote 112
Alibaba’s monopolistic practices, however, were not a recent phenomenon. JD.com, another Chinese e-commerce platform, filed complaints with regulators as early as 2015, alleging that Alibaba pressured vendors to choose between Tmall (affiliated with Alibaba) and other platforms. In 2017, JD.com escalated the matter by filing a lawsuit, accusing Alibaba of coercing merchants into refraining from opening stores on JD.com. Legal documents revealed that Alibaba had engaged in such practices since 2013, with JD.com seeking damages of 1 billion yuan ($153 million).Footnote 113 Despite these allegations, regulatory authorities took no substantial action until 2020.
The 2018 restructuring of antitrust regulators explains this delayed enforcement. Before the merger, antitrust functions were divided among three agencies: NDRC, MOFCOM, and SAIC. This fragmentation hindered enforcement owing to limited staff and unclear divisions of responsibility. For instance, SAIC’s antitrust team consisted of only a dozen individuals, and its overlap with NDRC’s responsibilities created confusion.Footnote 114 Unlike the traditional private economic sector, where regulatory systems evolved from the planned economy’s approval and control framework, the platform economy lacked fully established regulatory rules. This absence left regulators uncertain about addressing antitrust issues within the platform economy.Footnote 115 Moreover, the leadership’s focus on economic growth shielded domestic platforms such as Alibaba from scrutiny, with enforcement targeting primarily foreign multinationals.Footnote 116
Consolidating three antitrust agencies into one within the SAMR unified antitrust authority, enabling more systematic legislation and enforcement. In 2019, SAMR’s Anti-Monopoly Bureau began studying competition issues in the Internet sector.Footnote 117 SAMR released a draft of antitrust guidelines in November 2020, finalized in February 2021, that explicitly targeted Internet platforms. These measures included scrutinizing practices such as “choose one out of two” and incorporating Variable Interest Entity (VIE)-structured platforms into merger reviews.Footnote 118 By early 2020, SAMR had begun to strengthen antitrust legislation. Legislative amendments further bolstered the AML, with its first revision in fourteen years taking effect in August 2022.Footnote 119 These developments laid the groundwork for Alibaba’s penalty.
The centralization of antitrust enforcement powers after the 2018 merger significantly enhanced SAMR’s effectiveness. Post-merger, SAMR could more effectively mobilize labor force for unified enforcement. In December 2020, following the Central Economic Work Conference’s call to strengthen antitrust regulation, SAMR announced its high-profile investigation into Alibaba. Unlike previous low-profile announcements, this investigation was accompanied by detailed official media commentary, indicating that preparatory work had been thorough.Footnote 120 SAMR’s task force produced a comprehensive decision document that outlined Alibaba’s monopolistic practices, evidence, and legal rationale. While the fine was not the maximum allowed, SAMR’s technocrats employed rigorous reasoning to impose a proportionate penalty, demonstrating professionalism and transparency.Footnote 121
In short, the 2018 merger of antitrust agencies marked a turning point in China’s platform economy regulation. While enforcement delays initially persisted owing to limited autonomy, SAMR’s new Anti-Monopoly Bureau actively addressed regulatory gaps through legislation and systematic enforcement. The Alibaba case underscores how centralization and regulatory reforms have effectively enhanced China’s capacity to tackle platform monopolies.
Didi’s data security investigation
The regulatory scrutiny of Didi Global Inc., China’s largest ride-hailing platform, exemplifies how bureaucratic centralization has shaped data regulatory enforcement. The high degree of centralization in the CAC-dominated data security regulatory domain made the penalties against Didi more rapid and intense than in the other two regulatory domains.
On 2 July 2021, the CAC announced a cybersecurity review of Didi on its website, just two days after the company’s IPO on the New York Stock Exchange (NYSE).Footnote 122 The CAC also suspended new user registrations and removed Didi’s app from stores. These actions resulted in a $38 billion loss in Didi’s market value within a month.Footnote 123 After a year-long investigation, the CAC imposed a fine of 8 billion yuan ($1.2 billion) on 21 July 2022, citing violations of the CSL, DSL, and PIPL.Footnote 124 Under regulatory pressure, Didi was delisted from the NYSE on 10 June 2022.Footnote 125
The Didi case highlights the growing prioritization of data security in China and the CAC’s substantial authority as an integrated party–state institution. Historically, China had paid little attention to personal information protection, allowing legal ambiguities to create opportunities for regulatory arbitrage. Big tech firms exploited these gaps, using their research institutes to lobby for lenient obligations or collaborating with authorities to legitimize their operations.Footnote 126 However, concerns over cybersecurity and cross-border data transfers grew significantly after 2019. The CAC introduced regulations restricting cross-border data transfers and tightened security standards for connected vehicles.Footnote 127 A few weeks before Didi’s IPO, the CAC had expressed its hope that Didi would delay its IPO and urged the company to conduct a thorough self-examination of its cybersecurity, citing fears of foreign access to its data.Footnote 128 Despite these warnings, Didi’s decision to proceed with the IPO was perceived as defiance, triggering regulatory backlash.Footnote 129
The agency’s centralized control over data security regulation enabled the CAC’s swift response. As the principal regulatory body for data security, the CAC holds rulemaking, licensing, and enforcement authority after the 2018 restructuring. Its status as an integrated party–government body grants it considerable decision-making autonomy. Despite seeking public input and collaborating with other regulators on some initiatives, the CAC acted unilaterally in issuing rules to expand its jurisdiction over overseas IPOs, bypassing the cooperative rulemaking process mandated by existing cybersecurity laws.Footnote 130 The intensity of the CAC’s enforcement is evident compared to other regulators, such as the SAMR, which imposed lenient penalties on Alibaba for antitrust violations. In Didi’s case, the CAC not only imposed the maximum fines permitted under the PIPL but also penalized key executives, which reflected its uncompromising stance.Footnote 131
While centralization enabled the CAC to address Didi’s alleged misconduct swiftly, it raised concerns about transparency and accountability. The investigation process was opaque, with no public ruling issued. Coordination with other departments, which should have participated in the review, remains unclear.Footnote 132 Unlike SAMR’s detailed administrative penalty decision in the Alibaba case, the CAC released only a brief decision and conducted a press Q&A session to announce its findings, using terms such as “feigning compliance” (阳奉阴违) to rebuke Didi.Footnote 133 Moreover, retroactively applying the PIPL to Didi’s past actions violated the legal principle of non-retroactivity and the relevant requirement under China’s Administrative Punishment Law.Footnote 134 Critics have argued that the CAC’s handling of the case was less a technocratic process and more an ideologically driven reaction to perceived insubordination.Footnote 135 In sum, the Didi case illustrates the dual-edged nature of China’s centralized regulatory system. While it strengthens enforcement capabilities, it also amplifies concerns over due process and regulatory arbitrariness.
Conclusion
This paper examined how internal institutional changes since 2018 have facilitated the regulatory transformation in China’s digital platform sector. It argued that the 2018 institutional reforms laid the groundwork for intensified regulatory oversight through “domain-specific centralization.” Case studies of Ant Group’s suspended IPO, Alibaba’s antitrust penalty, and Didi’s data security investigation illustrated how variations in centralization across domains shaped regulatory outcomes.
The findings suggested that bureaucratic restructuring was an institutional precondition for regulatory transition. Regulatory centralization alone did not cause the crackdown. However, without it, enforcement would have been slower and more fragmented.Footnote 136 While leadership preferences have been emphasized in previous studies,Footnote 137 and some observers note that the reform weakened pro-market institutions, such as the NDRC and the State Council,Footnote 138 these political changes do not explain the variation in the enforcement. Instead, this study shows that institutional structure shaped how—and to what extent—political signals were implemented.
The implications of these findings are fourfold. First, this paper contends that the regulatory crackdown on the tech sector reflects a broader and systemic trend of centralization aimed at strengthening state control over key industries. This trend within the digital platform sector mirrors similar patterns in other policy areas, such as environmental enforcement, anti-corruption, and poverty alleviation.Footnote 139 These institutional shifts highlight that recent regulatory actions are part of an ongoing evolution within China’s bureaucratic structure, rather than isolated incidents. Recognizing this systemic centralization helps contextualize the tech crackdown within a broader strategy of governance reform and state consolidation.
Second, while existing studies on China’s Internet regulation have focused on strengthening Party leadership in online censorship,Footnote 140 this paper expands the analysis to economically driven regulations on digital platforms. The 2018 reforms placed the CAC directly under the CCP Central Committee, transforming it into a supra-ministerial regulator for data security. This trend also became more apparent in the 2023 institutional reforms in financial regulation. The 2023 reforms established the Central Financial Commission (CFC) as a party institution for the top-level design and overall coordination of financial stability and transferred the responsibilities of the former FSDC office to the CFC office.Footnote 141 These developments mark a shift in the Party’s influence from behind the scenes to a dominant position.
Third, by examining the evolution of bureaucratic structure, this paper contributes to understanding China’s state-driven regulatory model and provides a foundation for comparative studies with other regulatory models. While Western models rely on independent regulatory agencies with considerable autonomy, China’s regulatory model remains domain-specific and top-down. Domain-specific centralization has consolidated regulatory authority in specific domains but has failed to create a unified and centralized Internet regulatory regime. Rather than independent oversight, China’s regulatory model is deeply embedded within broader state institutions, with Party leadership playing an integral role in setting priorities and implementing policies. This difference provides the basis for a comparative study with regulatory regimes in Europe and the United States.
Finally, this paper shows that institutional reforms have reshaped the relationship between the state and platform firms. It reflects a broader shift in China’s economic governance—from fragmented oversight to domain-based, politically embedded control. The change expands the Party–state’s capacity to intervene in the economy and amplifies political intent. Centralization makes the system more responsive to top-level priorities, whether they favor intervention or deregulation. However, this model of responsiveness may produce unintended consequences. High responsiveness to central directives may lead to overcorrection or regulatory overreach. For instance, the 2020–2022 regulatory storm resulted in significant losses for the technology industry, with tech giants experiencing sharp declines in market value and mass layoffs.Footnote 142 It may also reduce policy stability and make outcomes harder to predict. While China has eased its regulatory stance toward platforms since mid-2022, the firms have still not recovered the confidence they had before 2020.Footnote 143
Acknowledgements
This work was supported by INHA UNIVERSITY Research Grant and the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2022S1A5A2A03051351). The authors would like to thank Sabrina Habich-Sobiegalla, Dongya Huang, and the anonymous reviewers for their valuable comments and suggestions on earlier versions of this article.
Competing interests
The authors declare none.
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