Chinese Regulators Want To Break Up Alipay But We’re Not Surprised

14th September 2021
Chinese Regulators Want To Break Up Alipay But We’re Not Surprised

Beijing’s regulatory opera is far from its finale. Having relentlessly rounded up so-called monopolies in almost every industry, the CCP is now revisiting its initial targets.

Alibaba has been facing scrutiny from the Chinese government since last year, when regulators prevented Ant’s record USD 35 billion IPO days before its debut after Jack Ma publicly criticised financial regulators.

So far, Alibaba received a record fine for anti-trust violations, and Ant was forced to restructure with tighter regulatory oversight.

Just last month, a dodgy Chinese government official came under fire for allegedly buying shares ahead of Ant’s IPO.

Now Beijing wants to tear apart Ant’s Alipay to create a separate app for its highly profitable loans business. Ant had already been asked to separate its two lending businesses Huabei and Jiebei from its financial products.

State-owned companies including Zhejiang Tourism Investment Group will hold a majority stake in the new venture. Ant will also be required to share user data to the new credit-scoring firm.

After months of regulatory flexing, the move is hardly surprising as Alipay’s loans business accounted for about 10% of China’s non-mortgage consumer loans last year.

Nonetheless, news of Beijing’s concerns sent Alibaba’s stock price down as much as 6% on Monday.

Image credit: Markus Winkler on Unsplash

Written by Bread News Team
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