UNDER REGISTRATION

  • LUCAS DE LA CAL

    @Lucasdelacal

    Beijing

Saturday, 2 January 2021 - 01:54

  • Share on Facebook

  • Share on Twitter

  • Send by email

Comment

  • Savings and Consumption.

    This is Aliexpress, the Chinese Amazon that has just opened a store in Spain

  • Savings and consumption.

    Singles Day: a Chinese Black Friday to measure the recovery in consumption

The Chinese Communist Party (CCP) has 89 million members.

If it were a country, it would be the seventeenth most populous in the world.

It would go just behind the Democratic Republic of the Congo and ahead of Germany.

Within Chinese society, having the CCP card, especially outside the big cities, grants a superior status, of respect.

All politicians in the 34 Chinese provinces are members of the party.

Many of the country's top entrepreneurs are too.

Especially those who run technology companies.

But only one of them appears each year on Forbes' lists of the world's most powerful people.

Young people use the nickname

"Papa Ma" to refer on their social networks to the man who built

one of the largest e-commerce companies in the world and who appeared in a movie playing a kung fu master who won all the matches against the stars of the national cinema.

In the West, "Papa Ma" is known as

Jack Ma, founder of Alibaba.

The news that Jack Ma was a member of the CCP was made public a couple of years ago, coinciding with the cleaning of party officials by Chinese President

Xi Jinping

.

By contrast, the government-loyal and innovative business elite, those who have established China as a technological powerhouse, were untouchable.

Beijing left the way free for its ideas and projects to flourish without regulators involved.

But that has changed.

The latest message from Beijing has been strong:

no one is above the party.

And the best way to make that clear was to go after the richest and most revered businessman.

It all started after the Chinese government, by direct order of Xi Jinping, halted the largest IPO in history.

Everything was set for the € 29.2 billion IPO of

Ant Group

, the parent company of Alipay, Alibaba's payment platform used by around

1 billion people

.

Although from Beijing, if they allowed the operation to go ahead, they feared that the CCP would lose power by giving Ant Group too much control over the financial system.

The Chinese government froze the public offering with the excuse that fintech did not meet the requirements.

But to understand the reasons for the coup, you have to go back to October 24.

At an economic forum in Shanghai, Jack Ma criticized Chinese regulators.

"We should not regulate an airport as if it were a train station. We should not regulate the future with yesterday's media," he said.

"It is impossible for the pawn shop mentality to support the financial demands of global development for the next 30 years. We must take advantage of our technological capabilities today and build a credit system based on big data, to get rid of the pawnshop mentality." the Chinese businessman continued.

"Ant's IPO was suspended shortly after the tycoon

compared China's state banks to pawnshops

. Chinese watchdogs often launch regulatory blitzkrieg, seeking to set an example of bad behavior as a deterrent to others." explained

Angela Zhang

, an antitrust expert at the University of Hong Kong.

But the Chinese government had still saved one last letter against Ma for Christmas Eve.

"The State Administration of Market Regulation of China has started an investigation into Alibaba Group for alleged monopolistic conduct."

This short note, published on Nov. 24 by state agency Xinhua, was the latest, and most painful, blow to China's largest e-commerce giant.

Hours later, Alibaba shares plummeted 15% when

an antitrust investigation was

opened

.

The complaint against Alibaba appears to focus on the practice of merchants or brands signing contracts to sell products exclusively on their platform.

Those who don't, and stick with other markets, run the risk of internet traffic being diverted from their online storefronts in Alibaba's Tmall emporium to other sellers.

Alibaba shares have lost more than a quarter of their value since October 24, when Ma criticized financial regulators.

Investors reacted to

fear that Beijing has lost patience with its tech giants

, even now perceiving them as a threat to the country's political and financial stability.

A situation that affects other large Chinese technology companies such as

Tencent, Meituan and JD.com.

Alibaba

and its three biggest rivals have lost around 164 billion euros since the country's regulators announced an investigation into the alleged monopolistic practices of the company founded by Jack Ma, who has lost more than 12 billion of his fortune.

For

Li Chengdong

, a technology analyst, the action against Alibaba and Ant Group is affecting other Chinese companies a lot.

"The new regulations are hurting the big Internet platforms, so other technology companies like Tencent are also seeing their share prices fall," he says.

"At first glance, the change in Ma's public image is largely due to the Chinese government's growing criticism of his business empire. But a look below the surface shows a deeper bias against the businessmen who pulled the country out of The economic era of the past four decades. Many in China seem to feel that

the opportunities enjoyed by people like Ma are disappearing

. While China has more billionaires than the United States and India combined, about 600 million people earn $ 150 a month or less, "writes analyst Li Yuan in the New York Times.

The Chinese market regulator announced on Monday the imposition of fines amounting to 500,000 yuan (61,800 euros) to Alibaba and Tencent for not complying with antitrust procedures in the acquisition of other firms.

The State Administration for Market Regulation (SAMR), assured that these conglomerates did not correctly report the operations.

In addition, he warned that

all digital companies must be subject to scrutiny by the authorities when carrying out mergers or acquisitions

, including those of SMEs, so that they can avoid the formation of monopolies and the "drowning" of other companies. with the aim of "hindering innovation".

According to the criteria of The Trust Project

Know more

  • China

  • Xi Jinping

  • Internet

  • India

  • U.S

  • Germany

Diplomacy & Geopolitics2021, the odyssey of humanity continues

Macroeconomics The EU closes an investment agreement with China

Emirates begins distribution of the vaccine against Covid-19 from China Sinopharm and Saudi Arabia gives the green light to Pfizer and BioNTech

See links of interest

  • Check Christmas Lottery 2020

  • Check Loteria Niño 2021

  • Tottenham Hotspur - Leeds United

  • Villarreal - Raise

  • Fuenlabrada - Leganés

  • 1. FC Cologne - FC Augsburg

  • Real Madrid - Celta de Vigo, live