Ant Financial’s IPO was shelved on Oct. 24 after a scathing appearance with regulators. Alibaba’s financial arm is under investigation for alleged monopolistic practices. Last Sunday, December 27, China’s central bank asked it to focus on its original business, online payment services. Alex Payette, director of Cercius Group, a consulting firm specializing in relations between companies and powers in China, answers RFI’s questions.
RFI: In recent years, Fintech giant Ant Group has become essential to the daily payments of millions of Chinese with its Alipay solution. Why the current rotation of the screw ?
Alex Payette : Ant Group over time became a bank and even a banking conglomerate, not really one. This poses a risk to the entire financial system. The Chinese power wants to control the enormous amount of debt not only owed by the government, but also by private companies. At stake is not only conglomerates, but the fate of millions of people. People will fund themselves through Ant Group. However, leaving a company ” approx Having China’s private debt is unthinkable. The party cannot allow this. This is only one aspect of the biggest challenge the Ant poses to the government today. The key question is who controls the debt?
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We recall that in 2019, a wave of scandals related to peer-to-peer lending platforms led to numerous closures. Chinese rule continues” homework » ?
The Chinese government said it was a merchant [qui vendent sur les sites tels qu’Alibaba] had to accept digital yuan payment, but they had the right to refuse payment with Alipay or Wechat share [l’application de paiement en ligne du concurrent Tencent]. This is already a way to get rid of them. Why? Because controlling payments also means controlling information: who buys what, when, why and where it comes from? The characteristic of the Leninist state is to know, to control information as much as possible. So the less the private sector is involved in controlling financial information, the better for the Party.
Jack Ma, on the other hand, asks that private economic actors be allowed to play their part. The party tries to use its hegemonic power“ to liberalize » but it’s clear and it doesn’t work.
In a recent article on the specialist website Asialyst, you place recent events in the larger context of Xi Jinping’s battle against opposition political factions.
Since 2013, we have seen Xi’s efforts to disrupt many sectors by launching investigations: oil, coal and telecommunications. It was only a matter of time before the power attacked companies such as Jack Ma and Jang Zhemin, who remained connected to the old regime. [1993 à 2003].
A special investigation team has been sent to check Ant Financial documents. As for the Disciplinary Commission, we find when we seek. As we went to the Disciplinary Commission yesterday, settlement here is a way of leading a factional struggle. Besides, it’s much cleaner with the adjustment.
At a time when we are discussing the terms of cross-investment between China and the European Union, it is not reassuring, no ?
Now, if I were a private investor with the right to open a company in China, I would ask myself questions. If they are willing to do this for Ant Financial, what resource is there for a foreign private company? Obviously, we will have to see the rules that will eventually be set by the Party as the new antitrust rules come into force.
But in China, the rules can change quite quickly if necessary. In any case, it will be necessary to carefully select the sectors to be invested in, evaluate possible partners and their relationship with the Party. From now until 2022 [date fatidique du 20e congrès du PCC censé renforcer les pouvoirs du Président], we will witness a more noticeable shift towards the public-semi-state sector. Partnerships will be more important than ever.