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Ant Underfoot

Beijing’s decision to postpone Ant Financial’s listing reflects a significant regulatory effort to redraw boundaries between market and state control of China’s digital economy, not just a reaction to Jack Ma’s seemingly impertinent public comments. Over the long term, the state needs to retreat to allow more dynamic market forces to develop China’s fintech sector—so far Ant has thrived under an easygoing regulatory environment and informal restrictions on foreign competition. But in the short term, China’s regulators seem concerned about Ant’s lending rates, its competitive practices and the advantages gained from the use of its data resources. This week’s aggressive assertion of state control only reminds foreign investors of the limits of market reform in China’s political system, and may discourage the development of one of China’s most dynamic and globally competitive industries.

Posted November 17, 2020
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