Fintech, Beijing's squeeze against Alipay: it must dismember activities

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September 13, 2021 Beijing wants to dismember

owned by the Ant group of Jack Ma, the founder of Alibaba, reconstructs the Financial Times. Alipay has not commented on this government order.

The group is expected to create a separate app for the lending business, on the orders of Chinese regulators, who have already established the back-end split of two lending businesses, Huabei - similar to a traditional credit card - and Jiebei, which grants small unsecured loans, from the rest of the financial offers involving external shareholders.

Now, the financial newspaper continues, officials want the two companies to be split into an independent app as well. The plan would also require Ant to hand over user data to a new credit assessment joint venture that is partly

, according to sources close to the file. A news that had a backlash on the stocks of tech companies in Hong Kong with the drop of almost 6% of Alibaba.

The order came as part of a tightening initiated by the Communist Party against the country's tech companies, with which the government attempts to

. Alipay, in addition to the one billion users in China, is also present in other Asian countries including India. "The government believes that big tech's monopoly power comes from their control of data," a source close to financial regulators told the paper. 

China's squeeze on the tech sector began last November, when regulators ordered the suspension of a record $ 37 billion debut by fintech conglomerate Alibaba after founder Jack Ma criticized the government for stifled innovation.

Ma's business empire has been targeted in broad action against Chinese tech companies aimed at breaking monopolies and bolstering data security. Behind the action of the Chinese government, however, there would be the desire to control this sector to prevent it from becoming too independent. In April, Alibaba received a

for abuse of dominant position.

Billionaire Jack Ma has remained

since Alibaba's listing was suspended, so much so that at first it was feared that he had been placed under arrest. 

Ant Group (formerly Ant Financial and Alipay) is a subsidiary of the Chinese Alibaba group. The group owns China's largest digital payment platform, Alipay, with over one billion users and 80 million merchants and a total payment volume that reached 118 trillion yuan in 2020.