‘The party is pushing back’: why Beijing reined in Jack Ma and Ant

‘The party is pushing back’: why Beijing reined in Jack Ma and Ant

The billionaire’s criticism of regulators triggered the move by communist leaders to limit the power of the fintech group

Jack Ma, the founder of Alibaba, is fond of dreaming big. As his company prepared for the 2004 launch of Alipay — which was then a clunky online payments service for ecommerce — he told colleagues that “someday it has the possibility to become China’s largest bank”, according to Porter Erisman, author of the 2015 book Alibaba’s World.

This week, that dream was almost realised — until Beijing decided otherwise. It jumped in at the eleventh hour to suspend the stock market listing of Ant Group, which is Alipay’s direct successor. Before the suspension, investors had valued Ant at $316bn — eclipsing not only the valuations of China’s biggest banks but also those of the US.

So why did Beijing take such a drastic step?

From several perspectives the suspension of a $37bn share offering — the largest in history — appears to be an own goal for China. Ant’s debut was due to mark the crowning glory of a homegrown financial technology — or fintech — champion. It was also expected to shore up confidence in Hong Kong after Beijing’s imposition of a new security regime this year. Its listing in Shanghai and Hong Kong was intended to show that China no longer needs US capital markets to finance its world-class corporations.