Ant Group, backed by Chinese billionaire Jack Ma, was set to raise $37 billion dollars from its dual listings of shares on both the Shanghai and Hong Kong stock exchanges.
The IPO was expected to be the biggest ever in the world.
It was supposed to be a win-win situation for Ant Group and China’s Communist Party elites.
However, our China affairs commentator Qin Peng said Jack Ma overestimated the Communist Party’s tolerance of different opinions.
Two weeks before the IPO, Jack Ma made his fateful speech.
“China does not have any systemic financial risk, because Chinese finance basically does not HAVE a system,” Ma said. “China has a risk called ‘the lack of a financial system.'”
The comment, which mocked the entire Chinese Communist Party, came with consequences.
On Nov. 2, top Chinese financial regulators summoned Jack Ma and then Beijing slammed the brakes on Ant Group’s record-setting IPO.
“The reason the CCP is dressing down Jack Ma is to set an example of him and warn other business people. Let them remember who the real boss is. It is the Communist Party. It’s Xi Jinping. You guys should not even try to sing a different tune. Don’t even hold thoughts of that. This is the CCP’s way of consolidating its authority,” analyst Qin Peng said.
The suspension sent shock waves across China.
“Whether it’s handing over data, or cooperating with the CCP politicians, or cooperating with the CCP’s overseas expansion, and including the country’s digital currency, Ant Group has been very obedient in these regards,” Peng said.
Ant group has helped Beijing develop the so-called “social credit” system, where every behavior is captured digitally. “Big Brother” fears surround an ill-defined “social credit” system being rolled out in China, facilitated by Alipay in which data on undesirable behavior is captured digitally and compiled in a “credit score” that could affect a person’s access to jobs or various services.
The fintech giant also invested in tech companies that enforce the Communist Party’s massive surveillance and crackdown on ethnic minorities in Xinjiang.
