In recent months, the Chinese government has shown signs of sharing US concern about the size of some of its companies and the power imbalance they generate. Recently suspended Ant Group’s IPO and it launched a series of measures for greater supervision over monopolistic activities, even at the risk of stopping growth that puts it on the technological frontier.
Repeatedly Mark Zuckeberg tied American leadership to the fate of big tech corporations like, obviously, his: Facebook. By launching your (failed) cryptocurrency, Libra, assured that it will “extend America’s financial leadership around the world as well as our democratic values and oversight ability.”
According to this idea, american power, its values, supposedly would expand alongside the power of its tech companies. At the same time, he warned that if regulations on large techno corporations continued to increase, China would win the geopolitical battle.
In recent months the argument has been losing steam as the Chinese government also seems fearful of the excessive power accumulated by some corporations that undermine, among other things, your financial power.
And 1999 Jack Ma was an English teacher who had been rejected by numerous universities when founded Alibaba, a company dedicated to electronic commerce. The company grew rapidly and, in a similar way to what happened with western techno companies, it expanded into the most profitable sectors. One of the most tempting is the financier for whom he created a successful subsidiary, Alipay, now called Ant Group. Currently, the digital payment system It is the largest in China and has more than 1 billion customers.
Jack Ma is the richest man in China with a personal fortune of more than 60 billion dollars, just over a quarter of what he has Jeff Bezos, the founder of Amazon his direct competitor from the western corner.
Ma is known for his eccentricities, As the farewell show he did in 2019 when he assured that he would retire and He played the guitar wearing a dreadlocks wig in a stadium for thousands of Alibaba employees or for the Kung Fu movies he stars in.
But the most troublesome thing about his eccentricity is that he tends to speak openly even to criticize Chinese government regulators O be defiant with phrases to his employees such as: “Focus on your work. If someone has to go to jail, I’ll go.” For worse, he repeated history at the Global Economic Forum in 2018.
Last October, during one of China’s largest business meetings, the Bund Summit, Ma announced that Ant Group would go public with a global record of $ 35 billion. In that twenty minute speech criticized the banks and he assured that they should simplify their antiquated financial services that avoided risk. He even described the Basel Committee on Banking Supervision as a “old man’s club“He did not seem concerned because China’s largest banks are state-owned.
The tension between the actors is growing: technology-financial companies (fintech) got fully into the financial business by simplifying access and taking advantage of their image of “technology companies” to capture markets in ways that many banks could not for regulatory reasons.
Ma began to reap the challenges sown in November when the government launched a series of controls on Ant Group that ended in suspension of the IPO. As a result of the news alibaba quote, the parent corporation, fell 17 percent.
A week later The Chinese antitrust authority came up with a proposal for regulations that seemed tailored to discipline the company. In December the Chinese government reiterated the need to stronger oversight against monopolies to avoid disorderly capital expansion.
Since then Jack Ma disappeared from the scene and there are even rumors that he was banned from leaving the country. Last Wednesday it reappeared, and Alibaba shares rose more than 5 percent.
The President of Ant Group, Eric Jing, I know He showed He publicly regretted the misconduct of his company and promised to speak with regulators to clarify all the necessary points.
Too much power
The crisis with Alibaba is not the only sign that the Chinese government is also concerned about the size of some companies that little by little feel in a position to challenge the central power.
In 2018 Bytedance, owner of TikTok, must have close a successful site dedicated to making parodies that the government considered excessive. As well Tencent was accused of developing a game addictive that supposedly favored myopia among young people and their actions also fell.
Everything indicates that the Chinese government wants to win the battle global geopolitics and is willing to show himself as a tempting market for investors. What he will not resign is his directing place in that project.