Chinese billionaire Jack Ma and his company Alibaba are once again being targeted by Chinese President Xi Jinping. This is the third time in less than six months that action is being taken against Jack Ma. On Monday, Nikkei Asia, citing the state-run Xinhua News Agency, reported that four government agencies had joint regulatory negotiations with Alibaba affiliate Ant Group.
These four government agencies were the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange. Xinhua reported that one of the deputy governors of the Central Bank, Pan Gongsheng, responded to reporters’ questions on behalf of the four departments.
He said that the reason for the financial authorities to question Ant Group again was to stop monopoly and wrongful expansion of capital. According to Nikkei Asia, the Chinese Communist Party has been taking action since October citing similar reasons.
The Chinese government says that such steps are being taken only to curb the monopoly of the market and prevent the haphazard expansion of capital. The report notes that Xi Jinping is engaged in fulfilling political motives by resorting to such newly created rules. Xi used this anti-corruption campaign against private companies.
Not only this, on Saturday, a long-defunct anti-monopoly law was suddenly and strictly enforced on Alibaba as a record 2.8 billion USD, equivalent to 4 percent of Alibaba’s domestic sales in 2019.
According to the report, during negotiations on Monday, the four regulators asked Ant to transfer all financial transactions of several of the newly established company, including Alipay service. Regulators questioned Ant Group earlier in November. Subsequently, company officials were also questioned in December.
The report said that in China, where the same party holds all the powers, questioning the top officials of a company means bad signs for the company. Whereas, before now, there have been two inquiries, then why a third time questioning?
According to the report, these changes could be linked to the party’s next National Congress in 2022, where Xi may announce an extension of his next reign. Xi has strengthened his political reputation within the party, but is yet to consolidate his hold on the business community.
For this, a team made by Xi is now pressurizing private companies to support Xi’s political agenda. He did something similar earlier with his party members as part of his anti-corruption campaign.
For Xi’s purpose to extend his reign, he needs to take control of the economic sphere, as he has done with the political sphere.
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