Naspers’s success with Tencent is proof of the benefits of China’s openness to the world, its ambassador to SA said, as he disputed claims that Chinese authorities’ efforts to curb the power of technology firms are an attack on investors in the biggest recipient of foreign direct investment in 2020.
Naspers, whose most valuable asset is a stake in Tencent, owner of the messaging app WeChat, has seen its value drop almost 20% in the past month, wiping off about R220bn as investors worried about the safety of their capital in the Asian country.
The R1.05-trillion company, headed by Bob van Dijk, has been among the most high-profile casualties since China started cracking down on technology companies at the end of 2020. The crackdown also led to the cancellation of a $37bn (R550bn) listing of Jack Ma’s Ant Group.
Chinese competition authorities ordered Tencent — in which Naspers is the largest shareholder — to stop exclusive music licensing deals and levied a small fine after taking similar action against other tech firms.
Exclusive deals
It is part of a crackdown that the authorities say is aimed at stopping anticompetitive practices, but critics say it is a power grab in which companies may even be nationalised, leading to huge losses for investors.
In an article in Business Day, Chen Xiaodong said China’s regulatory measures are meant to curb the monopolistic power and influence of large technology players, in line with similar action being taken by authorities in the US, Europe and SA. China is committed to maintaining and growing its trade relationship with SA, he said.
“Naspers, together with this portfolio on the Chinese market, has been growing and making achievements alongside Tencent. Its success story is an epitome of foreign investment in China,” he said.
“China has never wavered in its drive to further open to the outside world and to further improve its domestic business environment.”
The only major economy to escape 2020 without an economic contraction in the wake of the Covid-19 outbreak, China surpassed the US as the biggest recipient of foreign direct investment flows last year, according to a Reuters report.
The report was based on data from the UN Conference on Trade and Development.
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