After Jack Ma, Is China Freezing Its Entire Tech Sector?

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So what did we miss. Well over the break. The whole chinese communist party versus jack. Ma thing got even more interesting. China's market regulator suddenly announced an antitrust investigation into alibaba for alleged monopolistic practices. Yes this sort of thing can happen in china to. I guess because as far as we know. This is the first investigation of its kind in china's internet sector ever coating the financial times the market regulator said it was investigating suspected monopolistic practices including alibaba's tactic of forcing merchants to sell exclusively on its platform a practice known as pick one of two in china among other issues. The brief statement from china's state administration of market regulation said the investigation into alibaba had been opened. Recently after complaints ali. baba's hong kong listed shares fell more than eight percent in early trading. Alibaba said it quote will actively cooperate with the regulators on the investigation and quote and that its business operations remained normal. This is china's first antitrust investigation into a chinese internet company for abusing its market dominance said scott you and antitrust expert at jong loon large firm quote. In a worst case scenario alibaba could be fined up to ten percent of its previous years sales and quote lawyers said the initiation of a former investigation met the government already had some evidence to support its case regulators quote definitely have evidence but it is hard to say whether they will ultimately decide this constitutes monopolistic behavior and its punishment said you jin wa at shanghai deboned law offices and quote so this story continues to fascinate me because for years the communist party has allowed big tech companies to flower in china to show that china could match the west for innovative disruptive capitalism albeit with the special chinese communist party spin on exactly what that entails implicitly. I suppose it has always entailed the communist party. Always having the final say on what exactly disruptive capitalism entails and it's interesting to see them very openly pulling the reins on jack ma one of the earliest and highest profile of the entrepreneurial success stories in tech china alibaba was founded all the way back in nineteen ninety nine. It was china's most valuable company for a long time though. Suddenly no more alibaba's seen almost all of this year's stock gains erased over the past few weeks wants the hammer began to come down on. Ma it all began with the canceled. Ipo of ant group. The finance of alibaba. Also run by jack ma and this morning even more. China's central bank has announced. That aunt must overhaul its lending insurance and wealth management businesses and come up with a timetable to do so toot sweet quoting bloomberg. These central banks summoned aunt executives over the weekend and told them to rectify the company's lending insurance and wealth management services. The people's bank of china said and statement sunday while it stopped short of directly asking for a break-up of the company the central bank stressed that aunt needed to quote understand the necessity of its business and quote and come up with a timetable as soon as possible. The series of edicts represent a serious threat to the expansion of mas online finance empire which has grown rapidly from a pay pal like operation into a full suite of services over the past seventeen years before regulators intervened aunt was poised for a public listing. That would have valued at more than three hundred billion dollars with existing backers including carlyle and silverlake. The hung based firm now needs to move forward with setting up a separate financial holding company to ensure it has sufficient capital and protect personal private data. The central bank said authorities also blasted aunt for subpar corporate governance disdain towards regulatory requirements and engaging in regulatory arbitrage the central bank said aunt used its dominance to exclude rivals hurting the interest of its hundreds of millions of consumers and quote as dr trae. Who knows way more about china than i do. Said on twitter quote. I'm still perplexed why they decided to kill ant the day before its ipo. It seems like a genuine mystery to everyone whether this was crazy. Powerplay to show they can put the brakes on something as large as that with the of a finger. Or if they like just didn't really look at andt closely until i day and quote but it's not just about jack ma though. Isn't it quoting bloomberg alibaba. Group holding led a second day of frenetic selling among china's largest tech firms driven by fears that antitrust scrutiny will spread beyond jack ma internet empire and engulfed the country's most powerful corporations alibaba and its three largest rivals. Tencent food delivery giant matron and jd dot com. Have shed nearly two hundred billion dollars over two sessions since when regulators revealed an investigation into alleged monopolistic practices. Atma's sickness or company. That marked the formal start of the communist. Party's crackdown not just on alibaba. But also potentially the wider increasingly influential texts fear and quote

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