Is 3.6 trillion yen an illusion?

Is Jack Ma saying “Mouth is the source of disaster”? December 10, 16:21

"It's the biggest listing in human history!"


Said Jack Ma, a charismatic Chinese IT company.

Ant Group, a financial giant that he has substantial control over, was on the verge of getting a huge amount of 3.6 trillion yen in the stock listing scheduled for November.



However, just over a week later, the listing was suddenly postponed.

It is reported that Mr. Ma's remark was triggered by the Chinese government's rage.



China is now regarded as one of the most digital societies in the world.

What happened to Ant, one of the companies that has driven that transformation?

I will read it based on Mr. Ma's remarks.



(Ryoto Iga, Directorate General of China, Akito Yanagihara, Director of Shanghai Bureau)

Too bad timing

"Why does Jack Ma make such a statement now?"



Immediately after the financial forum in October, when Mr. Ma's statement at the beginning popped out, a former employee close to Ant's executives was angry.

Not only did the speech mention the listing, but it also sharply criticized China's financial authorities.


"China's finance has a lot of control, but it's clearly lacking in proper supervision,"

said Jack Ma.

In China, it is taboo for private sector officials to criticize the authorities in public.

Moreover, while refraining from listing "the largest in history", we should avoid words and deeds that are swayed by the authorities.



As market players buzz, Mr. Ma, along with other executives, will be jointly summoned and instructed by four financial authorities, including the People's Bank of China and the China Securities Regulatory Commission.

The content of the guidance has not been disclosed, but it is unheard of for the authorities to jointly summon the executives of one company.



And the next day, the listing postponement was announced.


As a result, Mr. Ma's remarks seemed to be the trigger, and it was the worst timing.

The reason for saying is "responsibility for the future"

Why did everyone speak at a time when they wondered?

Moreover, he retired from the chairman of China's largest online shopping company, Alibaba Group, which he founded last year, and was in a position to withdraw from the front line of management.

Actually, at the beginning of the speech, I cut out that I was worried about attending the forum in the first place.

However, he says, "I felt responsible for the future."

Jack Ma


"Great innovation is not afraid to manage and supervise, but it is afraid to be managed and supervised in the old way. Innovation is risky and trying to eliminate it is the biggest risk."

He criticized financial authorities for being too risky and hindering innovation.

Mr. Ma has been known as an opinion leader who makes undressed statements, which is rare in China.

There are many opinions among financial professionals that the "sense of mission" may be the background of this statement.

Loan decision in 3 minutes

So what is the "sense of mission" behind Mr. Ma's remarks?



Ant Group is known for its payment service "Alipay," which has more than 1 billion users, mainly in China.

However, in reality, the main source of earnings today is not the settlement service, but the investment and loan and insurance businesses, with sales of RMB 67.7 billion, or about 1 trillion yen in Japanese yen, accounting for 56% of the total.



In particular, the balance of small loans to small and medium-sized enterprises and consumers is overwhelmingly the number one in Japan, at over 34 trillion yen in Japanese yen as of June.

The feature is the speed of the loan, 3 minutes to fill out the application form, 1 second to examine the loan by AI, no people involved, and the keyword "3.1.0" is on sale.

How is the user's reputation?



I heard a man living in Xi'an, Shaanxi Province, who sells agricultural products using Ant's loan.

At first, I was thinking of lending from a major bank, but I gave up because the conditions were strict and the procedure required an ID card, family register, and marriage certificate.



On the other hand, Ant's loan required only one smartphone app.

A man using Ant's loan


"The bank always asks relatives, but there is no guarantee that they will get the loan. I got the money quickly from Ant and now I can do business with peace of mind."

Problems in the Chinese financial industry

Big data makes this kind of financing possible.



AI (= artificial intelligence) analyzes huge payment data of about 1800 trillion yen a year in Japanese yen, centered on the group company Alibaba, the largest online shopping company in China, and instantly judges the creditworthiness.

Originally, the loans of Chinese banks were biased toward low-risk state-owned enterprises and large enterprises, and it was always pointed out that the funds were not sufficiently distributed to SMEs.

This situation has also provided the ground for rapid growth in Ant's lending business, which uses the latest technology to make risk assessments.



For Mr. Ma, he seems to have taken pride in solving the problems of China's financial system through innovation.



In response, financial officials said on the day they gave guidance to Mr. Ma and others that they would tighten regulations to put a brake on the overheating of online retail loans.

It may seem that the timings overlap too much, but these tightening of regulations is not usually decided in a short period of time, but is considered for a certain period of time.



For this reason, there is a view that Mr. Ma, who was aware of the movements of the authorities in advance, "started criticizing from a sense of mission."

Why the financial authorities are "angry"

On the other hand, experts familiar with the Chinese financial industry appreciate the fact that Ant has provided funds to small and medium-sized enterprises, but they are not subject to the regulations that banks should have, so to speak. He points out that he has grown to create “loopholes” as follows.

Economist Liu Katsugun


"Ant is a financial institution (in effect), and if it goes bankrupt, it will have a big impact on the stability of society, so it must be strictly controlled. Before listing, it already has huge power. The government was becoming afraid of Ant

In fact, in Ant's loan business, Ant's own funds are only about 2% of the loan balance.

Banks are the main source of loans, and Ant mediates between SMEs and consumers and financial institutions and earns money from their fees.



It is a business that is possible because it has an overwhelming number of users and its data, but it can be said that it is a "delicious" business model that does not cause a big loss even if a bad debt occurs.



Ant said the risk was low in an AI review, but officials feared that unordered lending would swell and get out of control.

Xi Jinping Jintao also furious?

Was further increased the ripples of listed postponed, America's leading paper, The Wall Street Journal, "Xi Jinping Jintao is anger in the remarks of Mr. Ma, ordered the postponement" is that you have reported that.

The truth of this report is unknown.



However, if we wanted to stop the listing, it should have been stopped during the examination process, but it was postponed just before, so we are speculating that there may have been some special circumstances.



In fact, Ma Mr. has also cited the words of Xi Jinping Jintao in his speech.

Mr. Jack Ma


"President Xi's request to improve governance is instructing us to maintain sound and sustainable development under rational control, and control that cannot be developed. I understand that I'm not saying

Financial sources close to government officials told the interview that Mr. Ma's remarks could not be heard as if he was talking about the direction of government policy as Ant's influence became huge. I did.

Where is the strengthening of control?

Ant Group is expected to take some time to reapply for listing as it will be forced to make major revisions to its outlook for future performance due to the authorities' policy of tightening regulations.



China is now strengthening the Communist Party's control over private companies, and is clearly demonstrating that the country will take the lead in technological innovation.

However, when China's startup industry created a new business model that was beyond the boundaries of traditional regulations, the authorities had to some extent tolerated it, even in the gray zone, rapidly becoming one of the world's leading digital societies. It has been pointed out that it has brought about a great change.



In his speech, Mr. Ma emphasized that "innovation is market-led and comes from the field."



Since then, Mr. Ma has remained silent, but will the Chinese government bind private companies and move on to a path where Mr. Ma's remarks can be heard in vain?



It may be at a turning point for the future of the Chinese economy.

China General Administration of reporters


Iga Akirahito


2006. joined


through the Sendai station Okinawa stations Economy


current affiliation from August


Akihito Yanagihara,

Director of Shanghai Bureau


Joined in 2008


After working at Kagoshima Bureau and Directorate General of China, he is currently based in Shanghai and covers the social and political situation in China.