Yet, Xi wanted to clip some feathers of the Jiang section as investment companies linked to the grandson of former President Jiang Zemin and the son-in-law of former Politburo Standing Committee member Jia Qinglin stood to gain a fortune through Ant’s IPO. In 2016, he touted ‘ close and clean party-business relations’ (“亲” “清” 的新型政商关系) as the ideal. He launched the ‘Killing tigers and swatting flies’ (打虎拍蝇) campaign targeted at “Red families” using connections to accumulate stocks in big corporations. Xi, a princeling, has been consistent in consolidating power since the beginning of his tenure. The crackdown also reflects conflicts within the party. Although China claimed that issuing digital Renminbi (eCNY), which is even being developed for offline transactions, was targetted to counter cryptocurrency, it also equipped the state to counter unchecked financial monopoly of private tech companies and maintain the monetary authority of the central bank. China’s ubiquitous online payment platforms Alipay and WeChat Pay had built their parallel credit scoring system, which ran counter to Beijing’s to set up a centralised credit scoring system. Seemingly, China took the warning more seriously than its peers when the World Economic Forum (WEF) warned that the disruption caused by Big Tech poses a threat to the traditional banking system. This meant banks and brokerages, which are the traditional route for retail investors to buy into funds, could not have a share of the pie. Reuters reported that the Alibaba-owned payment platform Alipay was the only third-party channel through which retail investors could buy into five Chinese mutual funds investing in the IPO, which was a conflict of interest. Moreover, CSRC guidelines stipulate that mutual fund distributors should not directly or indirectly engage in any other business that conflicts with or has nothing to do with the management of private equity funds. The China Securities Regulatory Commission (CSRC) had initially approved Ant’s IPO application, but it ostensibly came under scrutiny after its founder, Jack Ma, overtly criticised the global banking standards and the Chinese regulatory system on the eve of the dual listing of his company. In November, China’s monetary regulators released draft rules on microlending, mandating capital requirements for technology firms offering loans. The core problem was that the so-called freewheeling fintech giant was operating as a bank, albeit unregulated. Financial News, a newspaper affiliated with the People’s Bank of China, published an elaborate commentary criticising Ant’s business model. Reducing financial risk was made a top economic priority during the 19th National Congress of the CPC, held in 2017. Even in the past, Jack Ma had been vocal in his criticisms of the banking sector. However, this was not the primary reason. News Asia reported that the China Securities Regulatory Commission (CSRC) had initially approved Ant’s IPO application, but it ostensibly came under scrutiny after its founder, Jack Ma, overtly criticised the global banking standards and the Chinese regulatory system on the eve of the dual listing of his company. But Ant set the bells ringing when it attracted US $3 trillion of retail investor bids, equivalent to the gross domestic product of the United Kingdom. However, most of them speculated that it is a part of Beijing’s plan to assimilate Big Tech into the CPC-led “Chinese Dream”, which includes financial stability, ideological stance, geopolitics, and social challenges.įintech business was already under the radar of central authorities when the Ant Group filed its initial public offering (IPO) in October 2020. The onset of the major techlash has left China watchers guessing as to what is the overarching reason for the consecutive measures taken by the Communist Party of China (CPC).
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