Chinese e-commerce giant Alibaba’s internet finance spin-off ant group is preparing to offer a huge stake that will show the world how far China has come in terms of payments, credit and investment in the smartphone age.
However before it is made public, the Chinese authorities are making sure they have their say.
Representatives of four financial regulators, including the country’s central bank, People’s Bank of China, met Monday with Alibaba co-founder Jack Ma, who is also Antony’s controlling shareholder, a Tours official said in a statement. The meeting was also attended by Anta executive chairman Eric Jing and his chief executive Simon Hu, the statement said.
At the meeting, “views on the health and stability of the financial sector were exchanged,” Ante said in a separate statement, adding that the company was “committed to implementing the views of the meeting in depth.”
Over the past decade, ants have changed the way people in China communicate with money. The company’s Ellipse app has become a daily payment tool for millions of smartphone users, as well as a platform for getting small loans and buying insurance and investment products.
But in the process, Ante has challenged the dominance of China’s state-owned banks and other institutions, which have long held a privileged position in the country’s financial and political system. Regulators have watched Antony’s rapid growth in some areas, fearing that defending in the event of a meltdown would be too big.
The ants reacted. Instead of using its own money primarily to raise loans, the company now effectively acts as an agent for banks, introducing them to individual borrowers and small businesses that they may not be able to reach.
This business model clearly works for many investors. The group’s dual IPO, which is taking place simultaneously in Hong Kong and Shanghai, is set to bring in at least 34 34 billion, the largest on record. The company’s new market valuation, valued at about 0 310 billion, will surpass that of many global banks.
Anthony Hong Kong shares are expected to start trading on Thursday. This list will make Mr. Ma, who is already the richest man in China, even richer.
Still, the company’s future lies at the mercy of Chinese regulators, whose views on tech and finance melding are still evolving.
Yu Basheng, head of the Zero One Research Institute, a Beijing-based think tank, said regulators have long been concerned about the risks to the sector and how to control it, but all of a sudden it is coming out at this particular time. On money and technology. “It’s definitely a statement of regulators’ attitude.”
In another sign of ongoing scrutiny, the country’s banking regulator, China Banking and Insurance Regulatory Commission, on Monday issued new draft rules for mic online microfinance businesses. Among them were capital requirements for loans and stricter restrictions on lending on provincial lines.
Bai Chengyu, an executive at the China Association MicF Microfinance, said the new rules could cause the entire microfinance industry to shrink.
While Mr Mae did not vent his frustrations with officials, he said in a recent speech in Shanghai that focusing too much on the risk of financial regulators could stifle innovation.
“We cannot operate an airport the way we operate a railway station,” he said. “We cannot use yesterday’s methods to manage the future.”
Guo Wuping, head of consumer protection at China’s banking regulator, returned on Monday, calling two popular features named Alipay in a critical article in a government-owned newspaper called the 21st Century Business Herald.
Mr. Guo argued that online online finance products are fundamentally no different from traditional ones, and therefore financial technology companies should be regulated like established institutions.
Mr. Guo wrote that the credit function in Alipay is no different from a credit card issued by Huawei, the bank. And the Ellipse loan facility is no different from GBB, a bank loan. Ant has identified Hubei and GB as the most widely used consumer credit products in China.
Mr Guo wrote that the loose regulation allowed financial technology companies to charge higher fees than banks. This, he said, has left some low-income people and youth in a debt trap, ultimately harming the interests and interests of consumers and putting families and society at risk.
Ante declined to comment on Mr. Guo’s article.
