Mar 18, 2019 (China Knowledge) - Chinese Premier Li Keqiang has called for more prudent regulations to be introduced into the country’s shared economy to bring about more sustainable growth in the industry.
The comments come after the country’s RMB 3 trillion shared economy which has been a hotbed for venture capital investments has been hit by a stream of controversies such as a safety crisis in ride-hailing giant Didi Chuxing and the collapse of major bike-sharing operators in recent times.
Premier Li Keqiang is now calling for regulations that will help to improve public security and safety in the industry while still assuring that there will be no arbitrary rules introduced which will disrupt the development of the industry.
Didi Chuxing which is China’s dominant ride-hailing services provider with a market share of more than 80% is now conducting a major overhaul of its operations to enhance passenger safety and efficiency to regain public confidence after two passenger deaths in separate incidents related to its drivers last year.
In addition, bike sharing company Ofo which attracted USD 2.2 billion in funding from investors such as Alibaba previously is now on the verge of bankruptcy having been sued by suppliers for unpaid bills and 12 million of its users waiting for deposit refunds.
In a similar vein, Ofo’s rivals Mobike is also undergoing restructuring and has since ceased its Asia-Pacific operations amid a downturn in the bike-sharing market.
Despite this, Premier Li believes that there is still room to grow in the country’s shared economy however the government has to do its part to guide healthy development of new models and businesses.
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