The Chinese Communist Party’s (CCP) annual legislative meeting this weekend will take action against the “unregulated expansion of capital,” according to Premier Li Kequiang, signaling another regulatory beating to teach outspoken tech billionaires who is truly in charge of the Chinese economy.
China’s state-run Global Times quoted Li and other CCP officials claiming the enhanced regulations would “ensure fair market competition,” stop “monopolistic behaviors,” and “prevent the disorderly expansion of capital.”
“The announcement came after China’s State Administration for Market Regulation (SAMR) in February published the finalized anti-monopoly guidelines for the platform economy, which vows to protect fair competition in the market,” the Global Times wrote.
SAMR is the Chinese agency that tore Alibaba founder Jack Ma’s financial empire to pieces after Ma had the temerity to criticize CCP regulators in an October speech. The February regulatory package referenced by the Global Times came close to giving SAMR nearly unlimited power to arbitrarily declare any Chinese company a “monopoly” in need of breaking up.
Ma mysteriously disappeared for months after criticizing the CCP, and was no longer China’s richest man when he resurfaced. The valuation of his massive Ant Group financial corporation fell by about 40 percent after regulators blocked its stock IPO. In fact, no one is precisely certain what Ant Group shares are worth at the moment, or what they might become tomorrow in the hands of CCP regulators, an uncertainty that prompted the Ant Group to suspend its share buyback program for employees on Monday.
The Financial Times on Tuesday observed that Ma’s battered financial empire is now in the hands of the very institutions he derisively compared to “pawn shops” in his October speech. Chinese banking sources suggested regulators irked by Ma’s criticism took a closer look at the Ant Group and were alarmed to discover it had “larger market capitalization than China’s largest state-owned banks,” spurring the frenzy of “anti-monopoly” measures that culminated in the rules previewed by Li Kequiang on Friday.
Seeking Alpha on Wednesday speculated the CCP’s paramount objective is gaining control of the immense database of information Ma’s companies have accumulated about their customers, a demand Ma is evidently still resisting as best he can, although he will “likely cave in” eventually.