Some commentators believe that Jack Ma got into trouble because he offended bigwigs and stirred up a hornet’s nest, thus getting involved in a top-level melee in Zhongnanhai.
The Ant Group, founded by Jack Ma, suddenly took down all its online deposit products a few days ago, shocking public opinion once again. A source close to the situation revealed that Ma was trying to survive under Beijing’s sanctions and wanted to hand over part of his stake in Ant Group. Ma had stated, “As long as the country needs it, it can take down any of Ant’s platforms.”
Recently, the Wall Street Journal cited sources familiar with the matter as revealing that back in early November, Chinese billionaire Jack Ma tried to salvage his relationship with Beijing by offering to hand over part of his stake in Ant Group to the Chinese Communist government during an informal meeting with regulators.
The article analyzes the offer, which has not been previously reported, as what appears to be an apology from Ma to the authorities.
On November 2, a few days before Ant Group’s planned public listing, Ma was suddenly interviewed by four major regulators: the Communist Party’s Central Bank, the CBRC, the SFC and the State Administration of Foreign Exchange. Outsiders believe that Ma was interviewed because he angered Beijing’s top brass with his speech criticizing the CCP regulators at the Shanghai Financial Summit in October.
Subsequently, regulators expressed concern about Ant Group’s business model, claiming that Ant Group’s online deposit products are illegal financial activities that are “driving without a license.
A senior media figure pointed out that Ant Group’s online financial products have grabbed a big piece of meat from the Communist Party’s banking system, which has long displeased the central bank and other authorities. This time, Jack Ma is in the crosshairs, and the authorities are taking the opportunity to regain hegemony over the financial market.
Ma’s “surrender” to the authorities failed to save Ant from going public, and the largest IPO in history, at more than $34 billion, was urgently halted, plunging Ma’s financial empire into a maelstrom overnight. Beijing has since stepped up its efforts to control China’s big tech giants.
On Dec. 18, Alipay took down all of its interweb deposit products without warning. Ant Group responded by saying that all internet deposit products on Ant’s platform had been taken down in accordance with the requirements of the Chinese Communist Party regulators.
This was followed by several companies, including Du Xiaoman Financial, Tencent Wealth Management and Jingdong, which also took down all or some of their online deposit products.
An article in China Daily analyzed that Beijing authorities have tightened control over private companies in recent years, such as property tycoon Wang Jianlin’s Wanda Group, which was forced to sell assets to repay bank loans, and Anbang Insurance Group, which was taken over by authorities and whose founder, Wu Xiaohui, was sentenced to 18 years in prison.
The Communist Party’s economy has been hit by a trade war and an epidemic this year, and the authorities have repeatedly stressed the need to prevent financial risks. At the conference, Li Keqiang proposed eight major tasks for economic work in 2021, one of which is to combat monopoly and disorderly expansion of capital.
Li Keqiang called for “improving the identification of monopolies and the management of data collection and use by platform enterprises” and “resolutely opposing monopolies and unfair competition. Financial innovation must be carried out under the premise of prudential supervision”.
According to current affairs commentator Zhong Yuan, Li Keqiang has targeted the Internet giants such as Jack Ma without naming them, reflecting that the Chinese Communist Party is out of money and is afraid of cutting a group of leeks.
The Central Government has sent a joint investigation team to Alibaba Group, and at the same time, the bidding plan for the Yunnan branch of Lakeside University, which Ma is planning to build, has been halted, according to a source quoted by Free Asia on the 17th.
According to Zhang Zhuan, a finance scholar at Kunming University, Ma’s situation will get worse with the current development of China’s political situation. “Unless he has something better to offer, he is being purged.”
Zhang points out that Ma has recently done several things that have made Beijing’s top brass very unhappy: for one thing, finance is the lifeblood of the Chinese Communist government, and for Ant Financial to go public would be tantamount to “carrying a powerful weapon” and would certainly be pursued; for another, Ma has also publicly criticized the government’s financial regulation, “a complete challenge to the top power,” something the top brass of the Communist Party is disgusted with.
“Ma is nothing more than a white glove, a proxy holder of the CCP’s assets, and it would be a matter of minutes to take back his power and wealth.” Zhang Zhuan said.
In addition, some commentators believe that Ma got into trouble because he offended bigwigs and stirred up a hornet’s nest, thus getting involved in a top-level melee in Zhongnanhai. Veteran commentator Jiang Qingping, writing in Taiwan‘s Caixin News, said Xi’s people have been eyeing Ma for a long time, and the Beijing authorities had already pointed the finger at him in the 2015 China stock market crash.
Ma has a surprising collusion of interests with Jiang Zemin’s family, and both Alibaba and Ant Group have heavy involvement of Jiang’s capital, making Xi Jinping‘s manacle worry that Ma will have second thoughts about him. Xi believes that Ma’s growing capital and influence in his financial empire will threaten his authority. Ma suffered this serious setback, in fact, Xi-Jiang infighting has been white-hot.
Recent Comments