China’s live-streamers harnessed e-commerce, social media and personal star power to fuel the rise of a multibillion-dollar industry in recent years. State media heaped praise on these mostly young entrepreneurs as examples of Chinese innovation. CCTV news anchors hosted shows selling appliances; Chinese leader Xi Jinping appeared on a rural live-stream channel hawking wood-ear mushrooms.
Now, influencers who peddle products to fans online are targets in Xi’s “common prosperity” campaign, a wide-ranging crackdown that is bringing celebrities and Internet companies to heel in the name of addressing inequality.
Authorities in Hangzhou hit Internet celebrity Viya with an unprecedented $210 million fine last week for evading taxes. Commentators, state media and other government bodies soon piled on the criticism. The live-streaming industry is among the “most vivid examples of industries that suck blood from the real economy,” one commentator wrote.
The official People’s Daily posted on Weibo that Viya’s fine should serve as a “wake-up call” to others. “It doesn’t matter how famous or how popular you are, if you evade taxes you cannot avoid punishment,” it said. Almost all provinces have given artists and live-streamers until the end of the year to pay any owed taxes and avoid severe punishment. The State Taxation Administration called for more investigations to “advance fairness and justice” and ensure that new industries “develop within regulations.”
Part of the regulatory blitz that has ensnared tech companies, private tutors and others, the campaign targeting live-streamers is about more than just showing Internet upstarts who is boss. It is also an effort to inject ideological rigor into the new economy after years of explosive growth and exert more control over which industries prosper as part of Xi’s economic vision.
“There may be conflicting views on how to deal with this part of the economy … but the more decisive trend is going in a more ideological direction,” said Fang Kecheng, assistant professor at the School of Journalism and Communication at City University of Hong Kong. “These online influencers are not regarded by top leaders as the best role models for society and for young people.”
In nightly sessions that are a combination of variety show and infomercial, influencers backed by large production teams urge viewers to take advantage of deals. The format, which gained popularity with the rise of short-video platforms such as Douyin, became more mainstream during the pandemic. Viya, known for her discounts and ability to sell anything — last year she sold a rocket launch, hosted by a Chinese aerospace company, for around $5.6 million — commanded an audience of more than 37 million in one month.
But the focus on getting people to buy as much as possible is at odds with Xi’s campaign, which calls for redistributing wealth and promoting sustainability. Hyperconsumerism and displays of wealth are discouraged. The crackdown also signals a shift in official attitudes about what industries should be promoted to improve the country’s competitiveness.
“From the government perspective, [live-streaming] isn’t a core part of technology. They are just doing online shopping and entertainment, and the government thinks they aren’t important industries,” said Yik Chan Chin, associate professor at Beijing Normal University.
Viya, a former singer from Anhui province whose real name is Huang Wei, is among the most prominent influencers to be called out. Hangzhou tax authorities, relying on big data tools to analyze Viya’s earnings, said she had underreported commission fees and masked other payments. Her fine exceeded the $129 million penalty imposed on actress Fan Bingbing for tax fraud.
“Due to regulatory loopholes, live-streaming became a tax haven for many in the past few years,” said Zhang Yi, chief executive of Shenzhen-based consultancy iiMedia Research. “The government had to make a point that no one is above the law, even prominent public figures like Viya.”
Last month, Hangzhou authorities fined two other prominent live-streamers for tax evasion. Their accounts on Taobao, an Alibaba-owned e-commerce site, Douyin and WeChat were shuttered this month.
The crackdown on an Internet industry populated by celebrities underlines another government target: those the ruling Communist Party views as having too much influence.
The Cyberspace Administration of China, the country’s Internet regulator, said this month that it had removed more than 20,000 influencer accounts for “abusing their influence online” and “disseminating misguided content.” In August, the Ministry of Commerce released a proposal for new standards regulating how live-streamers should dress and speak in front of the camera so as to “not violate public order or good morals.”
“It’s just not about taxes. Celebrities and top live-streamers are facing more scrutiny on what they do or say,” said Guo Yanbo, a 28-year-old content creator known as “Big Monster” to his more than 10 million fans on Douyin.
“Compared with two or three years ago, we are now more cautious with what we upload. When I make comedy clips, I won’t do something that’s too vulgar. When I review something, I make sure I don’t advocate wealth-flaunting or consumerism.”
Viya’s fate also underlines the shaky position of influencers even when they work to align themselves with the government. She raised funds last year for struggling businesses in Wuhan following the coronavirus outbreak, promoted an official “empty plate” campaign against food waste and was honored for her work with rural poverty alleviation by the state-affiliated All-China Women’s Federation.
Other top live-streamers such as Li Jiaqi, known as the “lipstick king,” are promoting more made-in-China goods. Last week, Chinese pop singer Wang Junkai of the boy band TFBOYS cut off a partnership with Intel after the company asked its suppliers not to source from the Xinjiang region to comply with restrictions from “multiple countries” on goods possibly linked to forced labor. Intel later apologized for the “trouble caused.”
Since her fine, Viya has disappeared from public view. She posted an apology on Weibo. “Wrong is wrong. I am willing to bear all the consequences for my mistake,” she wrote Dec. 20. But her Weibo page and accounts on Taobao and Douyin were taken down. Her nightly show on Taobao was canceled.
Her fans have also been quiet, with some pledging to keep posting the products that she sold on their personal accounts. It is unclear whether she will make a comeback — another sign of the uncertain future facing the country’s influencers.
“It’s more dangerous to become an influencer,” Fang said. “When the government needs to find someone to crack down on, to punish, they are more easily targeted.”
Lyric Li in Seoul and Alicia Chen in Taipei contributed to this report.