|From: Glenn Petersen||11/12/2020 5:22:43 PM|
|China’s President Xi Jinping Pulled Plug on Jack Ma’s Ant IPO|
Senior government leaders were furious about wealthy entrepreneur’s criticisms of regulators; rebuke was the culmination of years of tense relations
By Jing Yang and Lingling Wei
Wall Street Journal
Nov. 12, 2020 12:56 pm ET
Chinese President Xi Jinping personally made the decision to halt the initial public offering of Ant Group, which would have been the world’s biggest, after controlling shareholder Jack Ma infuriated government leaders, according to Chinese officials with knowledge of the matter.
The rebuke was the culmination of years of tense relations between China’s most celebrated entrepreneur and a government uneasy about his influence and the rapid growth of the digital-payments behemoth he controlled.
Mr. Xi, for his part, has displayed a diminishing tolerance for big private businesses that have amassed capital and influence—and are perceived to have challenged both his rule and the stability craved by factions in the country’s newly assertive Communist Party.
In a speech on Oct. 24, days before the financial-technology giant was set to go public, Mr. Ma cited Mr. Xi’s words in what top government officials saw as an effort to burnish his own image and tarnish that of regulators, these people said.
At the event in Shanghai, Mr. Ma, the country’s richest man, quoted Mr. Xi saying, “Success does not have to come from me.” As a result, the tech executive said, he wanted to help solve China’s financial problems through innovation. Mr. Ma bluntly criticized the government’s increasingly tight financial regulation for holding back technology development, part of a long-running battle between Ant and its overseers.
Mr. Xi, who read government reports about the speech, and other senior leaders were furious, according to the officials familiar with the decision-making. Mr. Xi ordered Chinese regulators to investigate and all but shut down Ant’s initial public offering, the officials said, setting in motion a series of events that led to the deal’s suspension on Nov. 3. Investors around the world already had committed to paying more than $34 billion for Ant’s shares. It isn’t clear whether it was Mr. Xi or another government official who first suggested the shutdown.
Ant declined to comment, and Mr. Ma couldn’t be reached. The Information Office of the State Council, China’s cabinet, didn’t respond to questions.
Since Mr. Xi rose to power in late 2012, the government has taken action against some of the country’s highest-profile private conglomerates. Dalian Wanda Group’s Wang Jianlin, once China’s richest man, and Wu Xiaohui of Anbang Insurance Group, are among the prominent entrepreneurs who faced government crackdowns.
Mr. Xi, center, is showing a diminishing tolerance for big private businesses that have amassed capital and influence.PHOTO: NOEL CELIS/AGENCE FRANCE-PRESSE/GETTY IMAGES
“Xi doesn’t care about if you made any of those rich lists or not,” said a senior Chinese official. “What he cares about is what you do after you get rich, and whether you’re aligning your interests with the state’s interests.”
Chinese regulators have long wanted to rein in Ant, according to the Chinese officials with knowledge of the decision-making. The company owns a mobile payments and lifestyle app, called Alipay, that has disrupted China’s financial system. Alipay is used by roughly 70% of China’s population, has made loans to more than 20 million small businesses and close to half a billion individuals, operates the country’s largest mutual fund and sells scores of other financial products.
Ant largely focused on serving people and companies that traditional banks long ignored, and it has emerged as an important cog in Chinese finance. It has long been spared from the tough regulations and capital requirements that commercial banks have been subject to.
Regulators earlier met with strong resistance to efforts to rein in Ant from the company’s financial backers, reflecting the support Mr. Ma has had from individuals in China’s top political and business echelons, according to a person familiar with the matter. Ant’s shareholders include Boyu Capital, a private-equity fund whose partners include Alvin Jiang, the grandson of former Chinese leader Jiang Zemin. China’s national pension fund, China Development Bank and China International Capital Corp. , the country’s top investment bank, all have large unrealized profits on their investments in Ant.
Mr. Xi sought to tighten financial regulations overall after the 2015 stock-market crash in China that tested the party’s firm hold on the economy. He also came to appreciate the benefits of having firms like Mr. Ma’s, whose payment app and lending operations changed the way the Chinese spend money, provided a reliable source of funding for small businesses, and made Alibaba Group Holding Ltd. BABA -0.50% , the e-commerce giant which Mr. Ma co-founded and used to run, the pride of China.
Mr. Ma, then Alibaba’s executive chairman, celebrated the company’s 2014 IPO at the New York Stock Exchange.PHOTO: ANDREW BURTON/GETTY IMAGES
“It has always been a very complicated relationship between Ant and the government,” said Cornell University professor Eswar Prasad, a former head of the International Monetary Fund’s China division. He said the company is no longer seen as too big and influential to be reined in by government agencies. Mr. Ma’s speech in October “was a trigger for the government to act,” he said.
Over the past decade, Mr. Ma, 56 years old, has come to epitomize the success of China’s internet and technology stalwarts. A former English teacher who loves martial-arts novels and Tai-chi, he founded e-commerce company Alibaba in his apartment in 1999, and its 2014 listing in New York held the record for the world’s largest IPO until last year.
Before his retirement from Alibaba last year, Mr. Ma often sang and performed at annual company galas. He celebrated his last day at the company by performing in a rock band wearing braided hair extensions and a leather jacket with spikes, in a Hangzhou stadium packed with 40,000 Alibaba and Ant employees.
Mr. Ma celebrated his last day at Alibaba by performing in a rock band before 40,000 Alibaba and Ant employees.PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
Alibaba this year solidified its position as China’s most valuable listed company after more than quadrupling its market capitalization in barely six years. Ant’s listing, had it gone ahead, would have valued the company at more than $300 billion and made it worth more than most of China’s and America’s largest banks.
Shares in Alibaba Group have surged in the years since the e-commerce giant went public, cementing its place as one of the world's most valuable companies. Alibaba currently owns a third of Ant Group.
Alibaba's market capitalization*
Ant’s roots trace back to 2004, when Alipay was started as an escrow service to facilitate payment transactions on Taobao, Alibaba’s online marketplace. Mr. Ma split off Alipay from Alibaba in 2011, a move that sparked an outcry from some of Alibaba’s big foreign investors and later resulted in a settlement with them.
Mr. Ma controls 50.5% of Ant’s voting rights, but he hasn’t ever held an executive or managerial position in the six-year-old company.
In 2008, when he was Alibaba’s CEO, Mr. Ma had lamented at a public forum that traditional banks in China were ignoring businesses that badly needed funding. “If the banks don’t change, we will change the banks,” he said, explaining that he envisioned “a more comprehensive lending system that served the needs of small businesses.”
In 2013, as Alibaba’s chairman, he again took aim at traditional Chinese lenders, saying at a public forum in Shanghai that the country didn’t lack banks or innovative institutions, but a financial institution that could power China’s economic growth in the next decade. “The financial industry needs disrupters” and outsiders to bring about changes, he said.
Around that time, Alipay created an online money-market mutual fund designed to help individuals earn investment returns on spare electronic cash sitting in their Alipay wallets. It was an instant success. Some people moved money out of their bank accounts into the new fund to earn higher returns, drawing complaints from some lenders that Alipay was siphoning their deposits.
In 2014, Alipay, along with Alibaba’s other financial businesses, were folded into Ant Financial Services Group, the company now known as Ant Group.
Ant’s mobile payments and lifestyle app, called Alipay, has deeply penetrated China’s financial system.PHOTO: ALEX PLAVEVSKI/EPA/SHUTTERSTOCK
For years, Mr. Ma largely managed to navigate Mr. Xi’s two seemingly contradictory goals: encouraging financial innovation and open markets to drive growth while keeping a rein on market forces to maintain control.
Ant’s big money-market fund became the world’s largest of its kind, with more than $250 billion under management by 2017. China’s securities regulator became concerned about the systemic risk the fund could create, and pressured it to shrink and lower its returns. Ant changed its strategy, letting rival money managers sell similar funds on Alipay to investors needing places to park their money, and its main fund shrank.
In 2017, China’s leadership revamped the country’s fragmented regulatory regime, which had often involved various regulators acting in isolation. It named Liu He, Mr. Xi’s top economic czar, head of a superregulator of sorts called the Financial Stability and Development Committee. One of its goals was to better coordinate actions by China’s various regulatory agencies.
Ant raised three rounds of private capital. By mid-2018, it was the world’s most valuable startup, worth $150 billion, based on the prices private investors had paid.
This year, deteriorating relations between the U.S. and China gave Mr. Ma an opportunity to win points with the ruling party. With Washington threatening to delist Chinese companies from U.S. stock markets, Beijing was eager to build up its own exchanges. Its securities regulators saw having a company such as Ant listed in both Shanghai and Hong Kong as a big endorsement of China’s markets.
Inside the headquarters of Ant Group in Hangzhou, China.PHOTO: ALY SONG/REUTERS
Ant changed its name in the summer, dropping the words “Financial Services.” Shortly after, it announced plans to go public, right around the first anniversary of China’s Nasdaq-style Science & Technology Innovation Board, better known as the STAR Market. After Ant filed listing documents in Hong Kong and Shanghai, the stock exchanges and Chinese securities regulators moved quickly to green-light its IPO.
But trouble was brewing with banking regulators, who were growing concerned about the risk banks were taking on by lending to Ant’s customers online. Since the summer, a spate of government regulations, guidelines and notices were rolled out to contain potential risks from the growth of digital finance and microlending.
The world’s biggest stock sale proved extremely popular with large and small investors. Privately, however, some Ant employees were worried about potential regulatory changes that could hurt the company’s growth prospects, according to people familiar with the matter.
On Oct. 24, Mr. Ma took the stage at a financial forum in Shanghai attended by top regulators, politicians and bankers. He said Ant’s IPO was “a miracle,” being such a large deal taking place away from New York. Attendees included China’s Vice President Wang Qishan, central bank governor Yi Gang and some senior state-bank executives.
During his 21-minute speech, he criticized Beijing’s campaign to control financial risks. “There is no systemic risk in China’s financial system,” he said. “Chinese finance has no system.”
He also took aim at the regulators, saying they “have only focused on risks and overlooked development.” He accused big Chinese banks of harboring a “pawnshop mentality.” That, Mr. Ma said, has “hurt a lot of entrepreneurs.”
His remarks went viral on Chinese social media, where some users applauded Mr. Ma for daring to speak out. In Beijing, though, senior officials were angry, and officials long calling for tighter financial regulation spoke up.
Mr. Ma’s remarks at an Oct. 24 financial forum in Shanghai went viral on Chinese social media.PHOTO: ORIENTAL IMAGE/REUTERS
After Mr. Xi decided that Ant’s IPO needed to be halted, financial regulators led by Mr. Liu, the leader’s economic czar, convened on Oct. 31 and mapped out an action plan to take Mr. Ma to task, according to the government officials familiar with the decision-making.
At a meeting of the Financial Stability and Development Committee headed by Mr. Liu, the group decided to “put all kinds of financial activities under regulation and treating the same businesses in the same way,” according to a government statement.
The decision was aimed squarely at Ant, the government officials said, and cleared the way for the pro-stability members of the group to dust off draft regulations they had been working on for a long time.
Among them was one regulating online microlending. With Mr. Xi’s blessing, the central bank and the banking regulator made the draft rule even tougher than previously conceived, according to the Chinese officials familiar with the decision-making. The new rule had a requirement that didn’t exist in previous drafts: Firms such as Ant would need to fund at least 30% of each loan it makes in conjunction with banks.
Just Borrow and Spend
Ant's Alipay platform has facilitated loans to numerous individuals in China. Its activities have recently drawn scrutiny from financial regulators, in part because banks fund many of the loans.
The draft rules were published on Nov. 2, the same day Mr. Ma and a couple of his executives at Ant were summoned to a rare joint meeting with the central bank and the regulatory agencies overseeing banking, insurance and securities.
The next day, the Shanghai Stock Exchange suspended the Ant IPO, citing the meeting and changes in the regulatory environment. The China Securities Regulatory Commission, which previously signed off on the listings, now says it was a “responsible move” to protect investors and markets, as the regulation, once implemented, would severely limit Ant’s business scope and profitability.
Ant could try again to go public. Market participants believe it will reorganize its business units, rethink its business model and inform investors of additional risks. All this likely will mean that Ant’s lofty valuation will be cut when it tries to list again, and the company may not be able to raise as much money as it aimed for this round, analysts said. Mr. Ma hasn’t made any public comments since the offering collapsed.
|RecommendKeepReplyMark as Last Read|
|From: Julius Wong||12/4/2020 6:49:28 AM|
|Completely driverless cars are on the streets in China|
Dec. 4, 2020 3:15 AM ET|About: Alibaba Group Holding Limited (BABA)|By: Yoel Minkoff, SA News Editor
Self-driving cars without human drivers as a back-up are now being tested in China's Shenzhen, according to Alibaba-backed (NYSE: BABA) AutoX, which said there were 25 vehicles operating in the city.
More than 100 robotaxis have been launched in other Chinese localities, but the vehicles still have a driver who can take over in emergencies or someone who can operate the car remotely.
"The next step is to increase the number of cars and the test area size, and to carry out tests in more cities," COO Jewel Li told CNBC's Squawk Box Asia. "We have a plan in the next six months to expand to 10 cities globally."
"It's close to a sci-fi kind of experience for most of our riders," she added. "When you really experience the vehicle fully driving itself, the level of excitement is overwhelming."
While the company's driverless robotaxis are not open to the general public yet, employees and private guests, such as media, business partners, investors and automakers, can make trips in the vehicles.
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||12/20/2020 1:06:20 PM|
|Jack Ma Makes Ant Offer to Placate Chinese Regulators|
Trying to salvage his relationship with regulators in a Nov. 2 meeting, the Chinese billionaire said he was ready to do what the country needed
By Lingling Wei
Wall Street Journal
Updated Dec. 20, 2020 10:55 am ET
As Jack Ma was trying to salvage his relationship with Beijing in early November, the beleaguered Chinese billionaire offered to hand over parts of his financial-technology giant, Ant Group, to the Chinese government, according to people with knowledge of the matter.
“You can take any of the platforms Ant has, as long as the country needs it,” Mr. Ma, China’s richest man, proposed at an unusual sit-down with regulators, the people said.
The offer, not previously reported, appeared a mea culpa of sorts from Mr. Ma as he found himself face to face with officials from China’s central bank and agencies overseeing securities, banking and insurance. They had called the Nov. 2 meeting after Mr. Ma had lashed out at President Xi Jinping’s signature campaign to control financial risks, which angered the top leadership.
The detail highlights how one of China’s most famous entrepreneurs tried to dig out of his predicament as he and some of his peers attempt to navigate a policy landscape where priorities have shifted toward greater state control over companies deemed to have grown too big and powerful.
“Ant Group cannot confirm the details of the meeting with regulators held on Nov. 2, 2020, because it is confidential,” a spokesman at the company said.
The suspension of Ant’s more than $34 billion share sale that followed the Nov. 2 meeting was just the start. It was followed by a barrage of actions against what’s dubbed the “platform economy,” or internet-based businesses championed by large tech firms.
Mr. Xi personally ordered Chinese regulators to investigate the risks posed by Ant, according to Chinese officials with knowledge of the matter, and to shut down Ant’s initial public offering, which would have been the world’s biggest.
People close to China’s financial regulators say there is no decision, for now, to take Mr. Ma up on his offer. One plan being considered involves subjecting Ant to tighter capital and leverage regulations, according to the people. Under that scenario, state banks or other types of state investors would buy into Ant to help cover any potential capital shortfall as a result of the tightened rules.
“The Chinese state has already effectively nationalized some of the financial infrastructure Ant built, such as the interbank payment system that became NetsUnion,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics who specializes in China’s fintech sector, referring to the firm now controlled by the central bank that clears transactions between banks and third-party payment providers. “So there is a precedent for nationalizing platforms that are viewed as serving a critical policy purpose.”
The government under Mr. Xi’s leadership in recent years has shown a resolve to bring to heel private conglomerates viewed as undisciplined—however politically invincible their founders might have appeared.
Property tycoon Wang Jianlin’s Dalian Wanda Group, for instance, has been forced to sell assets, shrink its business and pay back bank loans. Anbang Insurance Group, another private high roller, has been taken over by the state, while its founder Wu Xiaohui in 2018 was sentenced to 18 years in prison for fraud and embezzlement. In addition, HNA Group, an airlines-and-hotel conglomerate, has had to pull back on aggressive acquisitions overseas and sell assets.
Until recently, Mr. Ma also had a reputation for well-cultivated political ties. He hasn’t made any public appearance since his Oct. 24 speech.
For years, companies like Ant and e-commerce giant Alibaba Group Holding Ltd. BABA -1.68% , both controlled by Mr. Ma, and internet conglomerate Tencent Holdings, had largely enjoyed relatively little government oversight of their quest to build and expand internet-based payment, lending and other businesses.
With Tencent’s WeChat and other apps developed by these firms, millions of Chinese consumers and small-business owners can make a purchase, hail a taxi, execute an investment, or even take out a loan with a swipe on their smartphones. Firms like Alibaba and Tencent have become so successful that Chinese leaders including Premier Li Keqiang regularly hail the use of the internet and big data as crucial in driving future economic growth.
However, Beijing’s leadership has also shown increasing unease with the wealth and influence these firms have built as well as the risks posed by their lightly regulated activities, such as online lending made popular by Mr. Ma’s Ant. In addition, the big tech firms in some instances have complicated the government’s own effort to use data and technology to tighten social control.
It was wariness of the potential for heightened regulatory scrutiny over companies like his that drove Mr. Ma to deliver his broadside against regulators at a high-profile Shanghai forum in late October, criticizing them for holding back innovation. However, the speech backfired; the government not only called off Ant’s IPO but also stepped up effort to rein in Big Tech.
In November, China released draft regulations aimed at preventing these firms from colluding to share sensitive consumer data, forming agreements to block out smaller rivals and engaging in other anticompetitive behavior. Earlier this month, a meeting chaired by Mr. Xi of the Communist Party’s Politburo pledged to strengthen antimonopoly efforts next year and to “prevent the disorderly expansion of capital”—a message seen as portending a larger crackdown on internet giants.
Chinese officials say the leadership is particularly concerned that highflying entrepreneurs such as Mr. Ma keep attracting capital while exposing the financial system to greater risks.
Even before the halt of Ant’s IPO, for instance, regulators were already worried about the frenzy over the deal. The stock sale would have valued the company at more than the likes of JPMorgan Chase & Co. and Goldman Sachs Group.
Shortly after the Politburo meeting, China’s antitrust regulator fined Alibaba and a Tencent subsidiary for some acquisitions made in years past—again signaling the days of laissez-faire are over.
The trend has its parallel elsewhere in the world. The U.S., for example, is stepping up its antitrust investigations into Facebook Inc. and Alphabet Inc.’s Google to determine whether they abused their dominance of social media and online search and advertising, respectively, in the internet economy.
In China’s case, however, state-owned enterprises tower over the country’s telecommunications, financial services, airlines, energy and other sectors. By emphasizing “antimonopoly” now, Mr. Xi is squarely aiming at China’s internet giants that have harnessed unprecedented data on millions of Chinese consumers and businesses.
Alibaba and Tencent have sometimes heeded demands from law enforcement and other authorities to access user data, but they have so far resisted routinely sharing swaths of data that could help the government in other ways, such as building a consumer-credit scoring system akin to FICO used in the U.S.
The country’s central bank and traditional lenders don’t have the direct line to China’s free-spending younger consumers as Ant does. The company’s Alipay app is used by one billion Chinese, which has enabled it to collect troves of consumer data and use proprietary algorithms to assess individuals’ creditworthiness. But its data so far hasn’t been fully integrated into the central bank’s credit-scoring system, and such information gaps positioned Ant as a valuable partner to originate microloans for banks, especially smaller ones. In return, Ant pocketed handsome profits.
For now, regulators are debating whether Alipay or any other parts of Ant’s business represents monopolistic competition and if so, what actions should be taken against the firm.
“The odds of nationalizing at least parts of the company are not zero,” says a government adviser in Beijing.
—Jing Yang contributed to this article.
Write to Lingling Wei at firstname.lastname@example.org
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||12/23/2020 9:46:52 PM|
|Alibaba shares fall after reports of anti-monopoly probe by China|
PUBLISHED WED, DEC 23 20208:13 PM EST
UPDATED WED, DEC 23 20208:57 PM EST
Evelyn Cheng @CHENGEVELYN
-- Shares of Alibaba fell as reports surfaced that the Chinese government is conducting an anti-monopoly probe into the tech giant.
-- China’s State Administration for Market Regulation said through official online channels Thursday it has opened an investigation into Alibaba over monopolistic practices.
-- The news comes on the heels of an increasing — and largely unexpected — push by Chinese authorities to rein in their biggest tech firms through regulatory action.
BEIJING — Shares of Alibaba fell in both Hong Kong and extended-hours U.S. trading as reports surfaced that the Chinese government is conducting an anti-monopoly probe into the tech giant.
China’s State Administration for Market Regulation said through official online channels Thursday it has opened an investigation into Alibaba over monopolistic practices. The primary issue named was a practice that forces merchants to choose one of two platforms, rather than being able to work with both.
The news comes on the heels of an increasing — and largely unexpected — push by Chinese authorities to rein in their biggest tech firms through regulatory action.
An Alibaba representative did not immediately respond to a CNBC request for comment. Bloomberg first reported the news, which was announced by Chinese state news agency Xinhua.
Hong Kong-listed shares of Alibaba dropped more than 6% shortly after markets opened Thursday.
New York-traded shares of Alibaba fell more than 3% in after-hours trading on Wednesday.
Separately, Alibaba-affiliate Ant announced it received a notice Thursday from regulators for a meeting. Last month, regulators abruptly suspended the financial technology giant’s massive initial public offering just days before the planned listing in Hong Kong and Shanghai.
This is breaking news. Please check back for updates.
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||12/25/2020 5:07:19 PM|
|Why China Turned Against Jack Ma|
New York Times
December 24, 2020
That success has translated to a rock-star life for “Daddy Ma,” as some people online called him. He played an unconquerable kung fu master in a 2017 short film packed with top Chinese movie stars. He has sung with Faye Wong, the Chinese pop diva. A painting he created with Zeng Fanzhi, China’s top artist, sold at a Sotheby’s auction for $5.4 million. For China’s young and ambitious, Daddy Ma’s story was one to emulate.
But lately, public sentiment has soured and Daddy Ma has become the man people in China love to hate. He has been called a “villain,” an “evil capitalist” and a “bloodsucking ghost.” A writer listed Mr. Ma’s “ 10 deadly sins.” Instead of Daddy, some people have started to call him “son” or “grandson.” In stories about him, a growing number of people leave comments quoting Marx: “Workers of the world, unite!”
This loss of stature has come as Mr. Ma is facing increasing trouble with the Chinese government. Chinese officials on Thursday said they had opened an antitrust investigation into Alibaba, the powerhouse e-commerce company that he co-founded and over which he still holds considerable sway.
At the same time, government officials are continuing to circle Ant Group, the fintech giant that Mr. Ma had spun out of Alibaba.
Last month the authorities quashed Ant’s planned blockbuster initial public offering, less than two weeks after Mr. Ma publicly castigated financial regulators for being obsessed with minimizing risk and accused China’s banks of behaving like “pawnshops” by lending only to those who could put up collateral. On Thursday, on the same morning that the Alibaba antitrust investigation was announced, four regulatory agencies said that officials would meet with Ant to discuss new supervision measures.
On its surface, the shift in Mr. Ma’s public image stems in large part from the Chinese government’s growing criticism of his business empire. A look beneath the surface shows a deeper and more troubling trend for both the Chinese government and the entrepreneurs who powered the country out of its economic dark ages over the past four decades.
A growing number of people in China seem to feel the opportunities that people like Mr. Ma enjoyed are disappearing, even amid China’s post-coronavirus surge. While China has more billionaires than the United States and India combined, about 600 million of its people earn $150 a month or less. While consumption in the first 11 months of this year fell about 5 percent nationally, China’s luxury consumption is expected to grow nearly 50 percent this year compared with 2019.
Young college graduates, even those with degrees from the United States, face limited white-collar job prospects and low wages. Housing in the best cities has become too expensive for first-time buyers. Young people who have borrowed from a new generation of online lenders, like Mr. Ma’s Ant Group, have debts they increasingly resent.
For all of China’s economic success, a long-running resentment of the rich, sometimes called the wealthy-hating complex, has long bubbled below the surface. With Mr. Ma, it has emerged with a vengeance.
“An outstanding people’s billionaire like Jack Ma will definitely be hanged on top of the lamppost,” an online commentator wrote in a widely circulated social media post, referring to the famous lynching slogan in the French Revolution, “À la lanterne!” The article was liked 122,000 times on the Twitter-like Weibo platform and read more than 100,000 times on the messaging and social media app WeChat.
The Communist Party seems more than willing to tap into that resentment. This could mean trouble ahead for entrepreneurs and private businesses under Xi Jinping, China’s top leader, who values servility and loyalty above everything else.
In an annual leadership meeting last week that set the tone for the country’s economic policies for the coming year, the party vowed to strengthen antitrust measures and prevent “the disorderly expansion of capital.”
Some businesspeople say that the hostility toward Ant and Mr. Ma makes them wonder about the fundamental direction of the country.
“You can either have absolute control or you can have a dynamic, innovative economy,” said Fred Hu, founder of the investment firm Primavera Capital Group in Hong Kong. “But it’s doubtful you can have both.” His firm is an investor in Ant Group, and he sits on Ant’s board.
Mr. Xi made no secret about what his ideal capitalist should be like. Ten days after the Ant I.P.O. debacle, he toured a museum exhibition devoted to Zhang Jian, an industrialist who was active more than a century ago. Zhang helped build up his hometown, Nantong, and opened hundreds of schools. Business figures in the Xi era, the message went, should also put their nation ahead of business.
In a July meeting with the members of the business community, Mr. Xi pointed to Zhang as a role model and urged them to rank patriotism as their top quality. (Mr. Xi reportedly didn’t mention that Zhang died bankrupt.)
Mr. Ma has his own high-profile philanthropic projects, like several initiatives in rural education and a prize to help develop entrepreneurial talent in Africa. But in many other respects, the flamboyant technology entrepreneur differs greatly from Zhang.
He has long enjoyed a better reputation than his peers in manufacturing, real estate and other industries whose edge may derive from cultivating close government ties, ignoring the environmental rules or exploiting employees.
He is as famous for making bold statements and challenging the authorities. In 2003, he created Alipay, which later became part of Ant Group, putting his business empire square in the center of the state-controlled world of finance.
“If someone needs to go to jail for Alipay, let it be me,” he told his colleagues at the time.
He sometimes subtly dared the government to punish his defiance. Regarding Ant’s business, he said on multiple occasions, “If the government needs it, I can give it to the government.” His top lieutenants repeated the line, too.
At the time, few people took these remarks seriously. People who know him well considered them a very “Jack thing” to say. “Giving Alipay to the country? Jack Ma is just saying,” read the headline of a 2010 opinion piece in the China Business News newspaper.
Now the chances that those bold statements become real have heightened. “Given what has happened, eventually Ant will have to be controlled or even majority owned by the state,” said Zhiwu Chen, an economist at Hong Kong University’s business school.
The pressure on Mr. Ma signals a shift in how the Chinese government regulates the internet. It has long censored content, but in other ways it has adopted a laissez-faire approach. Regulations were spare. No state-run companies were involved. And at the beginning, China’s internet industry was small.
Today, Alibaba and its archrival, Tencent, control more personal data and are more intimately involved in everyday life in China than Google, Facebook and other American tech titans are in the United States. And just like their American counterparts, the Chinese giants sometimes bully smaller competitors and kill innovation. You don’t have to be a member of the Communist Party to see reasons to rein them in.
Instead of disrupting the state system, the companies have cozied up to it. Sometimes they even help the authorities track people. Still, the government has increasingly seen their size and influence as a threat.
China’s tech companies are not the country’s biggest monopolies, however. Those are owned by the state, which dominates banking and finance, telecommunications, electricity and other essential businesses.
“China Mobile is a monopoly. Industrial and Commercial Bank of China is a monopoly,” wrote Zhang Weiying, a well-regarded Peking University economist, in 2017, “because without the government permission, you can’t enter these industries.”
The article was reposted under several social media accounts last week but was quickly censored.
It’s too early to tell how far the regulators will go in reining in Mr. Ma and big tech. But some pro-market people in China worry that the country is drifting toward the hard line of the 1950s, when the party eliminated the capital class, using language that compared capitalist leanings to impurities, flaws and weaknesses.
To these people, some of the language recently used by Eric Jing, Ant’s chairman, evoked the era. At a conference on Dec. 15, he said the company was “looking into the mirror, finding out our shortcomings and conducting a bodily checkup.”
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||12/27/2020 12:20:45 PM|
|China orders Ant Group to rectify businesses|
PUBLISHED SUN, DEC 27 202011:23 AM EST
-- The People’s Bank of China, the country’s central bank, summoned Ant executives on Saturday and ordered them to formulate a rectification plan and an implementation timetable of its business.
--The statement said that Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage.
-- Chinese regulators last month halted Ant’s $37 billion stock debut in Shanghai and Hong Kong over regulatory changes.
Chinese regulators have ordered Ant Group, the world’s largest financial technology company, to rectify its businesses and comply with regulatory requirements amid increased scrutiny of anti-monopoly practices in the country’s internet sector.
The People’s Bank of China, the country’s central bank, summoned Ant executives on Saturday and ordered them to formulate a rectification plan and an implementation timetable of its business, including its credit, insurance and wealth management services, the regulators said in a statement Sunday.
The statement said that Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage. It also said that the company used its market position to exclude rivals and hurt the rights and interests of consumers.
The meeting came after Chinese regulators last month halted Ant’s $37 billion stock debut in Shanghai and Hong Kong over regulatory changes, and comes just days after China announced an anti-monopoly investigation of e-commerce giant Alibaba Group, which owns a 33% stake in Ant Group.
The orders from regulators could limit Ant Group’s expansion and throw its lucrative finance businesses into disarray.
Ant Group, which started out as a payments services for Alibaba’s e-commerce platform Taobao, has since expanded to offer insurance and investment products to its hundreds of millions of users in mainland China. Jack Ma, the founder of both Alibaba and Ant Group, is one of China’s richest and most prominent entrepreneurs.
Regulators ordered Ant Group to establish a financial holding company and hold sufficient capital. They also said that Ant Group should return to its payments origins, enhance transparency around transactions and prohibit unfair competition, while improving corporate governance and ensuring that it complies with regulatory requirements for its businesses.
Ant Group said in a statement Sunday that it would comply with regulatory requirements and enhance risk management and control, and that a working group would be set up to make the necessary rectifications.
“We appreciate financial regulators’ guidance and help,” the statement said. “The rectification is an opportunity for Ant Group to strengthen the foundation for our business to grow with full compliance, and to continue focusing on innovating for social good and serving small businesses.”
The scrutiny of Ant Group and Alibaba comes as China closely examines the influence of the country’s internet sector.
Last month, China released draft regulations to clamp down on anti-competitive practices in the industry, such as signing exclusive agreements with merchants and the use of subsidies to squeeze out competitors.
Alibaba and a company spun off by Tencent Holding Ltd. were fined this month for failing to apply for official approval before proceeding with some acquisitions.
Last Tuesday, regulators met with executives of Alibaba and five other major Chinese internet companies and warned them not to abuse their dominance to drive out competitors through use of exclusive contracts, predatory pricing and other tactics, according to a statement by the State Administration of Market Regulation.
|RecommendKeepReplyMark as Last ReadRead Replies (1)|
|To: Glenn Petersen who wrote (739)||12/27/2020 3:26:57 PM|
|From: Julius Wong|
|How The Chinese Use Illegal Online Gambling And Tether To Launder Over $1 Trillion Yuan|
Last month, another gig job platform backed by Ant Group, China’s dominant online payment service provider, was investigated for suspected money laundering activities. Beijing Bujiao Technology Co. Ltd. was suspected of having falsely issued more than 1.3 billion yuan of value-added tax invoices. Some of the company’s money laundering activities involved cross-border gambling, Caixin learned.
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||1/4/2021 8:26:51 AM|
|Where is Jack Ma? Alibaba's billionaire founder is reportedly missing following China's crackdowns on his companies|
January 4, 2020
-- Chinese billionaire Jack Ma is suspected missing, Jessica Yun reported for Yahoo Finance.
-- Per the report, the Alibaba and Ant Group founder has not been seen publicly in more than two months and he was abruptly replaced as a judge on the African talent show he founded.
-- Chinese regulators have been cracking down on Ma's business empire in recent months, halting Ant Group's IPO in November and launching an antitrust investigation into Alibaba in 1December.
-- The clampdowns came after Ma publicly criticized China's banking rules in October.
-- Ma, who has a net worth of $50.6 billion, was China's richest man until recently. Visit
Chinese billionaire Jack Ma, the founder of Alibaba and Ant Group, is suspected missing, Jessica Yun reported for Yahoo Finance.
The 56-year-old businessman has not been seen in public for more than two months, per the report.
Ma has been in the spotlight recently as China has cracked down on his business empire. In late December, Chinese regulators launched an antitrust investigation into Alibaba, the country's biggest e-commerce company that some refer to as "the Amazon of China." And in November, China had introduced a series of new regulations that put a halt to what would have been the massive initial public offering of Ma's fintech company, Ant Group.
The new rules came weeks after Ma criticized China's financial regulatory system at a conference in Shanghai in October. At the conference, Ma reportedly dismissed the global financial regulations used by China as "an old people's club" and said, "We can't use yesterday's methods to regulate the future."
Blair Silverberg, CEO of debt-financing startup Capital told Business Insider's Katie Canales in November that the new regulations were introduced " so the government can assert its supremacy over Jack Ma."
In November, Ma was replaced as a judge on the African talent show he founded, "Africa's Business Heroes," the Financial Times reported. The talent show did not immediately respond to Business Insider's request for comment, but an Alibaba spokesperson told Business that Ma could no longer be on the judging panel for the show's finale — which was filmed in November but has not yet been released — "due to a scheduling conflict."
"We do not have anything to add beyond that," the spokesperson said in response to questions about Ma's whereabouts.
Ma stepped down as chairman of Alibaba in 2019.
Until recently, Ma was China's richest man with a fortune that reached more than $60 billion. Ma's net worth has however taken a $12 billion hit over the past two months as China has tightened rules for the financial technology industry. Today, Ma is worth $50.6 billion, making him the fourth-richest person in China, according to the Bloomberg Billionaires Index.
As news of Ma's suspected disappearance has spread, an August 2019 prediction about Ma by another billionaire Chinese businessman has been recirculating on social media.
In the video interview, Guo Wengui, who fled China as a fugitive in 2014 and claims to be a whistleblower exposing corruption in the country, said that in the next year, Ma would likely end up in jail or dead because China wants to "take back" Ma's lucrative Ant Group.
Last week, the Chinese government ordered Ant Group, which owns China's largest digital payment platform Alipay, to scale back its operations after expressing concerns that its corporate governance was "not sound."
A spokesperson for Ant Group did not immediately respond to Business Insider's request for comment for this story.
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||1/7/2021 7:34:51 AM|
|Alibaba and Tencent shares fall after report says they could be added to U.S. blacklist|
PUBLISHED THU, JAN 7 20216:45 AM EST
Sam Shead @SAM_L_SHEAD
-- The shares of Alibaba and Tencent saw heavy falls after a report, citing several people familiar with the matter, suggested the Trump administration could be about to add the Chinese tech giants to a U.S. blacklist.
-- The conglomerates saw their shares on the Hong Kong stock exchange slide by around 4% after the report from The Wall Street Journal said that officials were considering prohibiting Americans from investing in the firms.
-- If they do get added to the U.S. blacklist, then American investors won’t be able to trade their stocks from Jan. 11.
The shares of Alibaba and Tencent saw heavy falls on Thursday after a report, citing several people familiar with the matter, suggested the Trump administration could be about to add the Chinese tech giants to a U.S. blacklist.
The conglomerates saw their shares on the Hong Kong stock exchange slide by around 4% after the report from The Wall Street Journal said that officials were considering prohibiting Americans from investing in the firms.
The U.S. government blacklisted 31 Chinese companies in November over concerns that they support Beijing’s military through an executive order. U.S. state and defense officials have been discussing expanding the executive order so the blacklist includes more companies, according to anonymous sources cited by the WSJ.
When the Hong Kong stock exchange closed, Tencent’s share price was down 4.69% to 568.5 Hong Kong dollars, while Alibaba’s share price was down 3.91% to 221 Hong Kong dollars.
If they do get added to the U.S. blacklist, then American investors won’t be able to trade their stocks from Jan. 11. Those that already own shares in the companies would have until November to offload them.
Trump signed the initial executive order shortly after losing the 2020 presidential election to Joe Biden and it is already having consequences. The New York Stock Exchange confirmed on Wednesday that it plans to delist China Mobile, China Telecom and China Unicom.
On Tuesday, the Trump administration moved to ban Chinese payments apps including Alipay and WeChat Pay, which are linked to Alibaba and Tencent respectively.
In December, the U.S. added Chinese drone company DJI and Semiconductor Manufacturing International to a trade blacklist. The U.S. Commerce Department said the action against SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.”
Alibaba’s battles extend beyond the U.S. and to its home turf, where Chinese regulators have recently launched an antitrust investigation against the company.
Jack Ma, Alibaba’s founder and CEO, is keeping a low profile and hasn’t been seen in public since last October after he appeared to criticize the country’s regulators.
Alibaba and Tencent did not immediately respond to CNBC’s request for comment.
|RecommendKeepReplyMark as Last Read|