Alibaba has been fined an astronomical amount by the Communist Party of China (CPC), which foreign media analyze as highlighting the fact that CPC President Xi Jinping is tightening his grip on the Internet business giant and consolidating his position ahead of next year’s 20th Communist Party Congress through a political struggle.
On Saturday (April 10), the CCP’s General Administration of Market Supervision charged Alibaba Group with violating the Anti-Monopoly Law and fined it 18.228 billion yuan ($2.78 billion), the highest fine ever recorded since the CCP implemented the Anti-Monopoly Law.
More than a dozen technology companies, including Tencent and Baidu, were also recently fined for their anti-monopoly law violations and other actions, but not in excess of hundreds of thousands of yuan.
An April 11 article in the Nihon Keizai Shimbun analyzed the Communist Party’s massive fine against Alibaba, highlighting the huge threat the company poses to the Communist Party’s leadership.
The Communist Party’s crackdown on Alibaba began with Ant Financial, which had planned a record initial public offering, but Communist Party regulators abruptly intervened in November to call a halt, forcing Ant Financial to postpone its plans to list in Shanghai and Hong Kong. The reason for this $18.2 billion penalty imposed by the CCP on Alibaba is that the group used its dominant position in online retail platforms within China to squeeze merchants through monopolistic practices.
The Nikkei article analyzed the CCP government’s extensive support for Alibaba during its early stages of development, including the regulator’s shutting out services offered by Facebook and Google in 2009 and 2010.
Other analyses suggest that Alibaba’s main business is “e-commerce,” including Taobao, online payment tools, and communications software. It is impossible for such a company to grow under the strict control of the Chinese Communist Party (CCP) over the Internet without the concession and patronage of the CCP’s top brass.
Ant Group’s overall profit for FY2019 was over RMB17.2 billion. Outsiders believe that the group has been subjected to a regulatory purge by the CCP in part because of nothing more than a large and rapidly expanding financial empire that has swallowed the interests of state-run banks and posed a threat to the CCP’s centralized rule.
Nikkei also analyzed that the CCP’s crackdown on Alibaba also appears to be the result of an internal political struggle within the CCP, which is set to replace personnel at the 20th National Congress in 2022, and Alibaba is said to be supported by Jiang Zemin and other Shanghai gang members, so the fine also reflects Xi Jinping’s struggle with Jiang’s forces.
A February article in China Daily revealed Alibaba’s interests with Jiang Zemin’s family, Boyu Capital. It is suspected that the secret investors behind Ant include Jiang Zhicheng and Li Botan, the son-in-law of Jia Qinglin, a former member of the Communist Party’s Politburo Standing Committee, and other members of the “Crown Prince Party. These people are a thorn in Xi Jinping’s side and potential political enemies, so Xi Jinping is out to cut off the golden veins of these political enemies and powerful people.
The Nikkei quoted sources as saying Xi Jinping was furious when he saw the secret list of people with interests behind Ant Financial Services. The list reportedly included many relatives and associates of “old leaders” of the Communist Party.
There is speculation that Xi is determined to continue his re-election after the 20th National Congress, and that punishing Alibaba is his way of undermining the influence of the political figures behind the company.
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