Dennison predicted that the regulatory campaign, which has been ongoing for several months, will not end for another 20 or 30 years and will be broken down into a large number of small steps.
“It’s all happening in stages – look how far technological regulation has come in the last 30 years,” commented the investor.
However, he does not expect uncertainty about future regulation to scare off long-term investors.
“I would say that right now patient capital is actually buying more and more shares of Baidu, Alibaba, Tencent and JD because they are looking at the long term,” Dennison said.
“Patient capital” is usually called long-term investments that have a less speculative nature.
Regulation will help companies
Dennison argues that tighter regulation may even benefit the Chinese giants.
First, tougher requirements will only strengthen their position in the market, as large companies will have more resources and will be able to adapt. While it will be more difficult for potential competitors to enter the market.
Secondly, the new model of “shared prosperity” promoted by the Chinese authorities is aimed at reducing inequality and growing the middle class, according to the investor. And its new representatives will also buy services provided by Baidu, JD, Alibaba