China's President Xi Jinping Personally Pulled Plug on Jack Ma's Ant IPO (wsj.com) 53
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, WSJ reported Thursday, citing Chinese officials with knowledge of the matter. From the report: 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.
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.
Forgot who owned his company (Score:2)
Too big for his britches.
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Or he just wanted to cash out and get out and all this is distraction to hide that real reason.
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are you listening
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You mean he was too big for Xinping's tiny mouse-size britches.
Come on Xinping, be a man. Give Tibet back to the Tibetans, close the re-education camps in Xin Jiang, pull your storm troopers out of Hong Kong, and let the free Chinese in Taiwan continue to be free. I suspect you aren't big enough to do that however. Putin, Lil' Kimmy, the alleged president of the U.S., Xinping: all birds of a feather.
Communism (Score:2)
Communists always end up being their own worst enemy.
Re:Communism (Score:5, Informative)
George Orwell, Politics and the English Language, 1946
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I don't think you've understood what Orwell was saying there.
Re:Communism (Score:4, Informative)
Perhaps the appropriate word is "autocrat" or "dictator". Fascism and Communism speak to rather specific forms of government, at least in political science. Autocrats and dictators exist in many political systems, even nominal democracies, but whatever government they claim to lead, autocrats and dictators usually have a monopoly on power, and whether directly or via some constitutional back door, can rule by fiat. So Mussolini was a Fascist, and Stalin and Mao were Communists, but they all wielded power at a level that they were effectively autocrats. Mussolini did this with the consent of the nominal head of state; the King of Italy, whereas Stalin and Mao had the trappings of more liberal regimes; councils of state and party (the Politburo) as well as legislative assemblies, but they were little more than rubber stamps. And China, after a fairly long period after the death of Mao of at least creating some checks on power via separating executive power between a Premier and President, has reversed course and made the Premier little more than a senior civil servant and handed all the power over to the President.
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Fascism and Communism don't really speak to a specific form of government in political science.
Fascism is exemplified by Germany, but as a political ideology it's not well developed theoretically and doesn't have a prescribed mode of governance. My actual political science course on ideologies held up apartheid South Africa as a contemporary fascist government because of its racial policies, but throughout that period they had an elected parliament.
Communism has more of a theoretical basis as a political s
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There can be very complex dictatorships. The First and Second Triumvirates of the Late Roman Republican were effectively tyrannies by committee.
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Think of it as autocracy in action.
Reality check (Score:5, Insightful)
After about seven years of Xi's purges, chance of WSJ having access to the kind of people who would actually have access to Xi himself and who would be willing to talk about it is between zero and "are you fucking retarded?" Because not only did everyone who had that kind of access and was willing to talk to Western media behind closed doors get deleted from existence in televised executions for "corruption", but Ant's actual problem was that it challenged the de facto monopoly of four state owned banks.
And there are plenty of high level officials in the Communist Party would would not look kindly on that if they were given a reason to notice. Who's job descriptions are literally to notice and do something should a competitor appear. And Ma was stupid enough to give a speech about how "old systems are outdated" just before the events took the turn they did. First rule in Communist systems is that if you're going to do something that might go against the Party line, you do it in a way where Communist apparatchiks can keep their face while looking away. Because it's not so much that they wouldn't let you do it if you paid them off. It's that to do so, they must have plausible deniability that there wasn't any ideological subversion involved, so they weren't in dereliction of their primary duty to enforce ideological primacy of Communist Party policy.
Otherwise, they're next in line for televised execution for corruption.
And Ma's speech effectively removed this element. Backlash was inevitable and exceedingly obvious, and likely came from people in charge of relevant policy to keep their face should Xi get a report about this in the future.
This is just more of the "anonymous sources say" nonsense that we've been getting fed over last five years. Content seems to universally be "whatever professional twitter user that wrote the story imagined could have happened".
Re:Reality check (Score:4, Interesting)
You've assumed that Xi doesn't want it (unofficially) known that he yanked the brake on Ant. That may not be a correct assumption.
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Unless he has completely lost his marbles, he did this intentionally and fully aware of the consequences. He essentially suicided-by-CCP this venture. "Why?" is the billion dollar question.
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This is a popular false narrative, just like the past popular false narrative of "exposure to benefits of capitalism will make Communists liberalise".
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Not really. Base assumption there is still the same as one for the "Communists will liberalise when they see benefits of Capitalism". It assumes democratic legitimation of the thought process. I.e. that "what people think in China" and "what people think abroad" matter to Communist Party of China.
This assumption is false. The entire premise on which Communists build their power is that will of the people is simply irrelevant. Which is taught domestically from early childhood. The base cultural foundation th
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This is the other extreme that is also wrong. Chinese aren't slaves to the state. Quite the opposite, they just ignore laws and rules in most cases where-ever it is possible and prudent. It's what makes functioning of the state possible in spite of the overwhelmingly inefficient party apparatus. A good example of this is Party line of "prostitution being evil" vs the reality of prostitution being exceedingly widespread and accepted by basically everyone, including the party apparatchiks. It's so ingrained i
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>Tell that to the Uyghurs and the Tibetan people.
They're not Chinese, so same social contract doesn't bind them or the state in the same way. Remind yourself that China views any people of Chinese Han ethnic origin as Chinese regardless of their citizenship status. Again, different cultural base assumptions from the West, where citizenship is the determining factor. You also forgot people who are far beyond either of those two in typical Han assimilation path, Mongols. Which is a common error for people
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Over wealthy and powerful corporations are seen as a national security threat, as is corruption. Forget all the lies, what governments do in other countries is get in contact with organised crime and use them to over through those countries. The criminals in power, then run government as a corrupt piggy bank for themselves, killing anyone who resists, until it all collapses a better government gets in and then is overthrown again by the US Government, to US corporations can pillage that country, using organ
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>So they do no screw around in China, too big to fail, is targeted and dealt with before it becomes that dangerous
I'm sorry, what? This action is literally to defend the "too big to fail" Big Four in China.
Comment removed (Score:5, Interesting)
Ceiling reached. (Score:5, Insightful)
What's happened here is that Jack Ma has reached the ceiling in China. Basically, if you control too much then you could influence the government when the design is supposed to be that the government is supposed to control businesses. As such, allowing Jack Ma to acquire any more power would enable him to challenge government control and thus had to be stopped in order for the CCP to retain it's authoritarian control.
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I would be weary
If you're so tired, then stop doing it. /s
Dear moderatards: (Score:2)
Humor? Have you heard of it?
Get a therapy. Seriously.
Is it because of control issues? (Score:3)
One of the huge advantages China has over the rest of the world is an advanced society/economy that's under a lot of government control. Private industry gives you your advanced economy, but having private industry control a lever of power makes that lever less effective. All we can do in the US is lower interest rates and buy debt to stimulate the economy...the Chinese government can just decide which sector is a winner and allocate resources to it via their control of the monetary system. Look at what happened in the 2008 recession -- there was a massive created demand spike for infrastructure and construction that spared their economy from the worst of it. If we had tried that, there would have been way more complaints than there were about things like TARP and the auto industry managed bankruptcy,
I guess that's probably why the IPO was stopped, to prevent anyone other than the government from having control over the economy. If I understand it correctly, these finance apps have pretty much replaced cash and traditional banking in China for most consumers. That'd be a lot of control to give up!
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All we can do in the US is lower interest rates and buy debt to stimulate the economy...the Chinese government can just decide which sector is a winner and allocate resources to it via their control of the monetary system.
You claim America can't do it.
If we had tried that, there would have been way more complaints than there were about things like TARP and the auto industry managed bankruptcy,
And then give examples to show that they did and can...
America is just as capable of allocating its stimulus in any fashion it desires. Picking any winners and losers that it wants.
Small business, solar, wind, nuke, megabanks, manufacturing, consumers directly, etc. Just pick one and hand out the cash and/or tax credits.
Ant's business (Score:4, Informative)
The problem of Ant is that their business is about lending substantial amount of money to people based mostly on credit history, as curated by its own credit agency, with no collateral. Lehman Brothers have taught us how well that kind of practice work out and how the US government stepped in to regulate them [wikipedia.org]. The new regulations [reuters.com], which are open for public feedback until Dec. 2, set a new requirement for small online lenders to provide at least 30% of any loan they fund jointly with banks. Apparently, when the US government regulates business, it is good; when Chinese government regulates business, they must have an evil agenda.
And also often not mentioned in China bashing articles are some background information (*): Ant Group's investors including Chinese government entities and state-owned companies [wikipedia.org] such as China Investment Corp (CIC), CCB Trust, China Life, China Post Group, China Development Bank Capital, and China's Social Security Fund [protocol.com]. So in essence, the Chinese government is regulating itself. Why is that a bad thing?
(*) and these news outlets would not forget mention those background when the story is about Chinese government controlling their private companies [bbc.com], while conveniently ignoring other facts such as US venture capitalists are their shareholders too [protocol.com].
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So in essence, the Chinese government is regulating itself. Why is that a bad thing?
Because that will make other people in the world realize that "capitalism" really means their government is controlled by the rich, since having their the government actually putting a stop to a record-breaking IPO from one of the super rich is unimaginable in their own country. Some would begin to question if their regulator have been doing their job.
What you said was absolutely right. It was widely reported in Chinese media that Jack Ma and Chinese regulators had a huge difference in opinion regarding t
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If he really wanted to just provide loans to people who normally can't get them he could have done it by risking his own cash.
They did at the start. Ant Financial started out when Alibaba found out they had a lot of liquidity because, like Paypal, people would load money into their AliPay accounts to pay for online purchase and people rarely moved the money back to their bank accounts. AliPay even gave ways for their customers to earn interest on the money in their AliPay accounts. With that much liquidity on hand, AliPay then launched their lending program to make money off the money. It was only afterwards that they expand the
Obligatory Zoolander (Score:3)
What is this? A digital payment system for Ants?
pot meet kettle (Score:2)
The analogy isn't quite perfect. Chinese Tik Tok is a concern in the US because data is becoming as valuable as gold. Having streams of US data going directly to a Chinese company that jumps whenever the Chinese Communist Party whistles is a real national concern. On the other hand, Xi just s
Enterprenour formerly known as Jack Ma... (Score:2)
...will from now on be known as Mikhail Khodorkovsky 2.0 for workgroups.
The bureaucrats have spoken (Score:2)
"Nobody is superior to us. Nobody."
Jack Ma is not alone ... (Score:2)
Jack Ma and his Ant group are not alone.
Xi Ping is now clamping down on internet giants in general [bbc.com]. Xi Ping's predecessors did not mind the rise of tech (and other) companies, as long as it employed people and brought in hard currency. Now it seems that the powers that be see them as potential threats to the iron fist, and possible challengers in the future. Therefore cutting them to size now is the strategy ...
Naked Capitalism has a quite different take (Obv) (Score:3)
From Doctorow's Pluralistic newsletter, I heard about Naked Capitalism's take on this and it's 180 from WSJ. (Which is pretty obvious.) Ant (and Jack Ma's entire fortune) is the Chinese equivalent of US's payday lenders, a predatory business that extracts a lot of wealth from the poor. Stopping this IPO could be seen as a global positive by any lights other than the Borkian "consumer harm" standard we now live by.
But IANEconomist, I'll listen to those in the know who care to comment.
https://www.nakedcapitalism.co... [nakedcapitalism.com]
Shoulda watched his mouth (Score:2)