China's crackdown on Jack Ma worsens, pressure mounts on Ant Group to shake up its lending

In the latest blow for business magnate Jack Ma, China’s Central Bank has asked his online financial giant Ant Group to shake up it's lending along with other consumer finance operations. As per media reports, the Chinese regulators have previously also asked the company to comply with nation’s regulatory requirements and continue as a payments service provider while warning against its growth in consumer loans and wealth management businesses. However, China’s Central bank announcement on December 27 came in the backdrop of intense scrutiny of anti-monopoly practices in China’s internet industry. 

Earlier, last month, the Chinese regulators had also abruptly suspended Ant’s $37 billion initial public offerings in Shanghai and Hong Kong. Moreover, just a few days ago, country’s antitrust authorities had reportedly said that they had launched an investigation into Jack Ma’s e-commerce conglomerate Alibaba Group Holding Ltd. Both the Chinese regulators, as well as the ruling Chinese Communist Party officials, have set about reining in Ma’s sprawling financial empire reportedly after he had publicly denounced the country’s regulatory system in October for stifling innovation. 

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Anti-monopoly probe against Alibaba

On December 24, Chinese regulators launched the anti-monopoly probe of the e-commerce giant Alibaba Group as CCP is attempting to limit the rapidly-growing power of the tech industries. Chinese President Xi Jinping’s government reportedly worries about the dominance of the competitors including Jack Ma’s Alibaba which is now one of the world’s biggest company by sales volume and Tencent Holding which is the operator of WeChat messaging service.

As per the Associated Press report, the regulators in the Asian country are primarily focussed on restricting the growth in private sector companies that are appearing to expand into online banking especially at a time when Beijing is trying to diminish the financial risks. CCP has reportedly also said that the anti-monopoly enforcement especially in the tech sector will be the main priority in 2021. CEO of Geo Securities Ltd. in Hong Kong, Francis Lun said the era of free growth is “over”.

“The era of free growth and ultra-high growth is really over,” said Francis Lun. “The government will decide what you can do.”

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