Monday, September 13, 2021
Partial nationalization threatens
China wants to smash payment service Alipay
Beijing continues to expand its control over the financial industry. Alibaba’s payment service Alipay is apparently in danger of being broken up – the state is to get involved in the well-running lending business. The move is another building block in the communist government’s new economic strategy.
The communist government of China is tightening the thumbscrews in the financial sector. The authorities want to smash the Alipay payment service, which belongs to the Fintech Ant Group, and set up their own platform for the profitable lending business, as the newspaper “Financial Times” reported, citing two people familiar with the matter.
The user data, which the fintech uses as a basis for its credit decisions, is to be outsourced to a new joint venture in which state-owned companies participate. Other Internet credit providers are also affected by the stricter regulation, it said in the report. Ant was unavailable for comment.
The move is part of a whole series of measures by which the Chinese authorities are tightening their oversight of many industries – from technology to education to the financial and real estate markets. This is intended to strengthen control over the economy and society after years of rapid growth.
With the regulatory measures, China’s ruler Xi Jinping wants to correct the market order, promote fair competition and protect consumer rights and the socialist market economy system, it was said recently in the state “People’s Daily”.
Ant Group was already targeted by regulators in the fall of last year: the Chinese authorities thwarted the company’s planned IPO and thus also burdened the parent company Alibaba. On its debut, Ant Group would have been valued at more than $ 300 billion, making it the largest public offering in the world. Now the authorities are demanding a fundamental renovation of Ant.
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