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Market over-reacted to proposed lowering of fees for Chinese food delivery platforms - state media

Published 02/22/2022, 09:28 PM
Updated 02/22/2022, 10:00 PM
© Reuters. FILE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes, at the Lujiazui financial district in Shanghai, China January 6, 2021. REUTERS/Aly Song

BEIJING (Reuters) -China's state-run Economic Daily newspaper said on Wednesday the market had over-reacted to the government's guidance that food delivery platforms should lower service fees.

The policy was not intended to target the platform economy as the government recognises its crucial role in the economy, the Economic Daily's commentary said.

China's state planner, the National Development and Reform Commission (NDRC), on Friday issued a set of rules to promote a faster recovery from the pandemic in the services sector, including guidance for online food delivery platforms to reduce service fees to help to lower operating costs for catering businesses.

The proposed policy had wiped as much as $26 billion off the market capitalisation of Meituan, China's dominant food delivery platform.

Meituan's shares jumped more than 7% in reaction to the Economic Daily's commentary.

© Reuters. FILE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes, at the Lujiazui financial district in Shanghai, China January 6, 2021. REUTERS/Aly Song

The policy guidance aimed at calling on companies to shoulder more social responsibilities and the commission rates would be ultimately decided by the market, the commentary added.

China's technology sector has been trying to weather a year-long regulatory crackdown, which has wiped out billions of dollars in the market value of some of China's biggest corporate giants.

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