China has increased its control to control a huge technological empire controlled by Jack Ma, co-founder of Alibaba and one of the country’s wealthiest people.
The Beijing authorities ordered an investigation into the allegations of “monopoly behavior” by the online retail giant Jack Ma on Christmas Eve and have now ordered its financial technology company Ant Group to reduce its business scale.
Pan Gongsheng, deputy governor of the People̵
Pan Zeng convened representatives of ants to attend a meeting with regulators in Beijing on Saturday. Pan said that ants must “strictly correct illegal credit, insurance and wealth management activities.” Analysts said that the ant department that provides these services is the fastest growing and most profitable business.
Ant Group said in a statement that it will establish a “rectification work group” and “fully implement” the requirements of the regulatory agency.
The company said: “We will expand the scope and scale of openness for win-win cooperation, review and correct our work in protecting consumer rights, and comprehensively improve our business compliance and social responsibility.” “Ant Financial will be timely. Develop a rectification plan and work schedule, and seek guidance from regulatory agencies in the process.”
In the struggle between Beijing and Jack Ma, the latest round of d-kills caused Alibaba’s stock price in Hong Kong trading to fall by 8% on Monday. Jack Ma has been regarded as China’s greatest modern entrepreneur until he began to strictly abide by the regulations.
Since October 24, Alibaba’s stock price has fallen by more than a quarter. Jack Ma accused China’s financial regulators and state-owned banks of adopting a “pawnshop” mentality at a high-profile summit in Shanghai.
CCP officials fought back, accusing Jack Ma’s company of violating various regulations and intervening two days before the transaction was originally scheduled to start trading in Shanghai and Hong Kong, preventing Ant Group’s $37 billion (27 billion pounds) listing.
The Bloomberg Billionaires Index shows that the suppression of Jack Ma’s business activities has wiped out more than US$10 billion (£7.4 billion) of wealth and put him at the top of China’s richest people with a fortune of approximately US$49 billion. Now, the richest person in China is Ma Xiaoma (it doesn’t matter), chairman and CEO of rival technology company Tencent.
Zhang Zihua, chief investment officer of Beijing Yunyi Assets Co., Ltd., an asset management company, said investors are concerned that Beijing’s counterattacks against Jack Ma may continue, even if they implement all necessary changes. He said: “There are no specific penalties for Alibaba’s antitrust investigation, which makes investors very worried.”
Li Chengdong, a technology analyst in Beijing, said that the lawsuit against ants has also put heavy pressure on other Chinese technology companies. Li said: “The new regulations are hurting large Internet platforms, so the share prices of Tencent and other technology companies are also falling.” “Alibaba is now the target of regulators, so the response is even stronger.”
On Christmas Eve, the State Administration of Market Supervision of China stated that it had ordered an investigation into “suspicious monopolistic behavior” of Alibaba Group Holdings Limited.
An editorial in the “China People’s Daily” stated that preventing monopoly and anti-competitive practices is “a requirement for improving the socialist market economic system and promoting high-quality development.”
“This survey does not mean that the country’s attitude towards encouraging and supporting the platform economy has changed.”
Analysts and policy experts say that Beijing’s actions against Jack Ma’s company may have resulted from his outspoken statements at the Bund Summit in Shanghai on October 24, which triggered criticisms of over-regulation and the banking Dominance of the country.
According to the transcript, Jack Ma said: “We should not use this method to manage train stations to regulate airports.” “We cannot use yesterday’s methods to regulate the future.
Ma Yun said: “The pawnshop mentality cannot meet the financial needs of global development in the next 30 years.” Ma Yun founded Alibaba in a one-bedroom apartment in China 21 years ago. “Today we must use our technical capabilities and establish a credit system based on big data to get rid of the pawnshop thinking.”
Ma Yun spoke with Wang Qishan, the right-hand man of former security czar and Chinese leader Xi Jinping and other senior officials. Yi Gang, Governor of the People’s Bank of China; Vice Minister of Finance Zou Jiayi and Jack Ma’s remarks were all the rage on Chinese social media and were seen as direct attacks on government officials.
In November last year, Ant Group was preparing to become the world’s largest initial public offering, when it was suddenly closed by Beijing, 48 hours before it started trading in Shanghai and Hong Kong. Before the suspension of trading, investors valued Ant Financial at US$316 billion (£234 billion), exceeding the valuations of China’s largest banks and the United States and the United Kingdom.
The pause at the time was blamed on “changes in the financial technology regulatory environment and other major issues,” but analysts regarded this intervention as a warning to Jack Ma.
“The party once again reminds all private entrepreneurs that no matter how rich and successful you are, it can always take out the carpet from under your feet,” wrote Bill Bishop, author of the China-focused newsletter “CITIC”.