After the Chinese Communist Party (CCP) congress, the partnership between large state-owned enterprises and private companies is accelerating.

According to a U.S.-based news outlet, China’s large state-owned telecom companies, including China Unicom, China Mobile, and China Telecom, have recently signed cooperation agreements with large private groups, including Tencent, JD.com, and Alibaba.

On October 27, the State Administration for Market Regulation disclosed on its website that a new joint venture between China Unicom and Tencent was unconditionally approved. The review was completed on October 18.

The newly established joint venture is focused on content delivery networks (CDN) and edge computing.

Following the transaction, China Unicom holds a 48% stake in the joint venture, Tencent owns a 42% stake, and the relevant employees have 10%.

All parties claim that the new company does not involve a change in the parent company’s equity. Still, there are worries that Tencent will be nationalized as a private enterprise.

Similar concerns were raised after China Mobile and JD.com, on November 1, also signed a strategic cooperation agreement related to data centers, cloud computing, big data, and network security.

Wu Qiang is an independent political scientist in Beijing. He said that though this is the public-private partnership between large state-owned telecom companies and private enterprises, the era of the CCP’s control of the economy has arrived.

San Yu, a scholar in Hangzhou, added that the pace of nationalizing China’s private enterprises is accelerating.

The scholar expected that such public-private partnership models would be expanded to other areas next year.

Some analysts pointed out that the cooperation between the two sides is based on their own needs. For example, Tencent needs China Unicom’s sales channels, while China Unicom needs Tencent’s products, technology, and experience.

But Wang He, a commentator on current affairs, said that although there are commercial interests in the joint ventures between the major private enterprises and state-owned companies, it is also a performance of political achievements.

Wang said this is a “chaotic reform,” but the authorities will never admit it.

Li Hengqing, an economist in the United States, said that Chinese leader Xi Jinping wants the national economy to be entirely under the leadership of the CCP because, in the past few decades, private enterprises have played a more extensive and substantial role in the economy.

The economist said that these private enterprises would slowly be cannibalized by large state-owned companies, one by one.

He added that the private companies’ assets would be “mixed and reformed” to state-owned companies, making them “bigger and stronger” and becoming the CCP’s world-class strategic state-owned players.

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