“It is unthinkable for Beijing that a private company holds more data on its fellow citizens than itself”

Losses and profits. The Chinese state continues to keep pace with the Internet giants. Especially if they think they want to compete with public banks. Alibaba had had the bitter experience of this when the authorities blocked the listing of its financial subsidiary Ant Financial in October 2020. Since then, the largest store in the world has been constantly negotiating with the authorities the “acceptable” way to continue to lend money for its billion customers. Last constraint, unveiled this September 13 by the Financial Times, Beijing would require the firm to separate its credit business, small consumer loans, from the rest of its payment transactions.

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The paper doesn’t go into great detail about what increasingly looks like a dismantling of Alibaba’s financial activities and doesn’t cite a source, but the reality of the state offensive is clear. In June, after months of negotiations, Beijing granted a license to the company to continue lending money, on condition that it establishes a separate subsidiary with new shareholders.

Dazzling progress

It must be said that this profession of lender took a considerable part in the results of Ant Financial. On its own, the company represents nearly 10% of consumer credit in China. A meteoric increase due to the speed of obtaining a loan by the consumer. A few seconds are enough to grant a small loan to the right client. This is all made possible by the depth and quality of the data Alibaba holds on its users. It is precisely this that irritates the authorities. It is unthinkable for him that a private company holds more private data on his fellow citizens than him. Especially in the field of finance when he is setting up a digital currency that will allow him to trace all the transactions of individuals and companies in the country.

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The new stage also seems to be taking shape. 1er September, the Reuters agency unveiled the government’s intention to withdraw the Alibaba subsidiary from its credit scoring, in other words, analysis of the credit quality of its customers. This key data would be housed in a specific company, owned equally by Ant Financial and a public company, the Zhejiang Tourism Group. From now on, the loan request will have to go through a green light from this entity. It will be much slower for the customer but much more secure for the State, master of Chinese finances.