China takes stake in Tencent unit

The Chinese government has taken a "golden share" in a domestic subsidiary of tech giant Tencent (0700), the latest sign of China stepping up its control over its tech sector.

Wangtou Zhicheng, an entity controlled by the Chinese government, now owns a 1 percent stake in Shenzhen Yayue Technology after an investment of 600,000 yuan (HK$641,772), according to database Qichacha.

Wangtou Zhicheng is owned by the China Internet Investment Fund, which was set up by China's cyberspace regulator and finance ministry. It marks the continuation of a trend that has seen Chinese government-backed funds or companies take an about 1 percent stake in key subsidiaries of data-rich companies such as ByteDance and Alibaba (9988).

Shares of Tencent slumped 2.9 percent yesterday.