Ant Group, the internet finance division of Chinese e-commerce giant Alibaba, is gearing up for a massive equity offering that will show the world how far China has come in bringing. payments, credit and investment in the smartphone age.
Before it goes public, however, the Chinese authorities are making sure they have a say.
Representatives from four financial regulators, including the People’s Bank of China, the country’s central bank, met with Jack Ma, the co-founder of Alibaba, who is also Ant’s controlling shareholder, today Monday. Also present at the meeting were Ant̵7;s executive chairman, Eric Jing and its chief executive officer, Simon Hu, in a statement.
At the meeting, “perspectives regarding the health and stability of the financial sector were exchanged,” Ant said in a separate statement, adding that the company is “genuinely committed. Show in-depth meeting’s opinions ”.
Over the past decade, Ant has changed the way people in China interact with money. The company’s Alipay application has become a daily payment tool for hundreds of millions of smartphone users, as well as a platform for taking small loans, purchasing insurance products, and investing.
But in the process, Ant has challenged the dominance of China’s state banks and other institutions, which have long held a privileged position in the country’s financial and political systems. Regulators have cautiously reviewed Ant’s rapid growth in certain areas, concerned that it might become too big to bail out in the event of a crisis.
Ant responded. Instead of mainly using its own money to renew loans, the company now effectively acts as an agent for banks, introducing them to the individual borrowers and small businesses they have. inaccessible.
It is clear that this business model works well for many Ant investors. The group’s dual IPOs, which take place simultaneously in Hong Kong and Shanghai, are set to raise at least $ 34 billion, the largest number on record. The company’s new market valuation, around $ 310 billion, will make it more valuable than many global banks.
Ant’s Hong Kong shares are expected to begin trading on Thursday. The listing would make Ma, who is already the richest man in China, even richer.
The company’s future, however, remains in the hearts of Chinese regulators, whose views on the combination of technology and finance are still evolving.
“Regulators have long considered the risks in this area and how to regulate it,” said Yu Baicheng, head of the Zero One Research Institute, a Beijing-based consulting organization. all of a sudden appeared at this particular time ”in terms of finance and technology. “It is certainly a statement of the managers’ attitudes.”
In another sign of continued scrutiny, the nation’s banking regulator, the Insurance Regulatory Commission and the Bank of China, on Monday issued a draft new rule for financial businesses. online micro key. Among them are higher capital requirements for loans and tighter controls on lending across the provincial levels.
Bai Chengyu, an executive director at the China Microfinance Association, said the new regulations could shrink the entire microfinance industry.
In a recent speech in Shanghai, Ma did not feel pity with the authorities when he said that in a recent speech in Shanghai, financial regulators were too focused on Curbing risks can inhibit innovation.
“We cannot manage an airport the way we manage a train station,” he said. “We cannot use yesterday’s methods to manage the future.”
The head of consumer protection at China’s banking regulator, Guo Wuping, retaliated on Monday, naming two popular features at Alipay in an article of harsh criticism. in the 21 Century Business Herald, a government-owned newspaper.
Mr. Guo argued that online financial products are not fundamentally different from traditional products and that fintech companies should therefore be managed in a similar way to established institutions.
Huabei, a credit function at Alipay, is no different than a credit card issued by a bank, Mr. Guo wrote. And Jiebei, a Alipay loan feature, is no different than a bank loan. Ant has called Huabei and Jiebei the most widely used consumer credit products in China.
Lax regulations have allowed financial technology companies to charge higher fees than banks, Mr. Guo wrote. According to him, this “put some low-income people and young people into debt trap, ultimately harming the rights and interests of consumers, even jeopardizing families and society”. .
Ant declined to comment on Mr. Guo’s article.