Source: Bloomberg Businessweek
"Since September, China's government has launched a coordinated regulatory crackdown, which in November scuttled the Ant public offering and, together with tough new antitrust rules, triggered about a $140 billion ... decline in the market value of Ma's Alibaba."
Like the USA and the EU, China wants to rein in the power of big tech. Its somewhat surprising move to cancel Ant Financial's IPO is part of a bigger trend towards caution and regulation, because technology has created massive concentrations of power and capital among a few key players.
It's interesting, then that Western media mostly emphasise the uniquely Chinese aspect of this story, with phrases like "his public rebuke is a warning that Beijing has lost patience with the outsize power of its technology moguls, increasingly perceived as a threat to the political and financial stability President Xi Jinping prizes most."
Political and financial stability are also very much on the minds of the average Zhou (pronounced "Joe") on the streets of Beijing or Shanghai. Chinese people have experienced double digit economic growth and a corresponding improvement in quality of life for the last 3 decades. If that progress can be steadied, they will welcome it. Wouldn't you?
Be contextually aware of the trend: governments are seeking stability even as they strive to innovate. Part of stability is avoiding concentrations of wealth and power, and aiming for confluence of interests*. Engineer your value proposition to meet the need.
Thank you to @Glyn MacLean for championing this concept!
The western media has been misled or trying to mislead the world on the China government intent in the debacle.
Jack had turned the Ant Finance into a humongous financial institution that did not follow the banking law. Its registered capital of RMB3 billion was providing loans of more than RMB 40 billion. The interest that is charged to the borrowers was many times the bank loan interest. Jack was using the disguise of new technology to overwrite banking practices. Hence, if it is allowed to go public with the huge market value, many investors would lose their investment if the whole scheme collapses. No one is above the law.
The government is also not pleased that Alibaba is launching services and products competing with small stalls in the food market, mini supermarkets, general services, etc. It would cause many such small businesses to burst, and more people lose their businesses and jobs. Alibaba should use its resources to launch services and products competing with the global giants. To simply put it, China does not need a dinosaur to stamp the rabbits on the ground.
Thank you for the insight, @Calipe Chong