Ant-Man has been taken down!

Forgive my lousy gag and accept my apologize to the fans of Ant-Man. In fact this post absolutely has nothing to do with the Marvel's character, Ant-Man. It is solely a joke on the subject because the China fintech company, Ant (Group), did get into trouble on its IPO in China and Hong Kong bourse thus the Man, Jack Ma, behind the Ant did get trapped with some headache.

While the ballot counting on the farce of the U.S. presidential election is still going on, perhaps equal attention has been drawn on another farce of the abrupt suspension of the IPO of the Ant Group here in Hong Kong, and in China as well. It was said that there were more than 1.5 millions subscribers on the IPO so it potentially became the talk of the town. It is abrupt because the suspension was called in two days prior to its intended listing day. It is a farce because the suspension was due to the supervisory bureau's sudden awareness, just prior to the IPO, that the business model of Ant Group has potential great threat to China's financial stability.

It is absolutely correct and legitimate to suspend the Ant's IPO if its business model is hazardous. However, the Ant has been working on such business model for years and its IPO application should has been scrutinized by the related supervisory bureau well ahead of the intended listing day. It is impossible that the Bureau only noticed such potential threat two days prior to the listing. Nor the Ant's business model evolved into a great threat to China's financial stability within days after the approval of IPO by the Bureau. Yet the farce happened and perhaps it is the only possible in a nation with China characteristic. 

A farce may be but it did happen with its context. The Ant Group is China's rising fintech company whose major owner, Ma Yun, is the nation's richest man now. Ma is also the owner of China's largest online shopping platform, Alibaba which is listed in the U.S. and Hong Kong and it is commonly regarded as a private company. Being the largest online shopping platform, Alibaba has enormous influential power in China's economy because there are tens of thousand SMEs selling their products in its platform and behind these tens of thousands SMEs and together with their suppliers there are tens of millions workforce engaged and feeding the same amount of families. Alibaba's annual turnover is also gigantic so its operation is about the make or break of the economic as well social stability in China. 

With so much in stake, Ma and his companies become so important to the ruling of the country that the CCP cannot sleep well without a full control on them. Yet officially Ma's companies are privately owned. It is still alright if Ma is fully obedient to the governance but he is so daring to make criticism saying that there is no financial systematic risk in China because there is no system in the first place during a public speech in last month. This is just too rebellion that he cannot be tolerated in the CCP's eye. This is the trigger which most commentators commonly see it why the Ant Group's IPO was suspended.

Perhaps Ma's recent speech did cause the CCP's dissatisfaction but this move should not be the main reason because despite such speech did slam the financial bureau's face but it does not bring material threat to the ruling of CCP. It is Ant's business nature that matters. Traditionally China's lending market is dominated by the state-owned-banks(SOB) and through these SOBs the CCP controls which business sectors and which corporations can be funded to maneuver its financial and economic policies. Such ability is equally important to the firm control over its army for the CCP's ruling on the nation.

The rising of the fintech companies like the Ant Group is an undermining of CCP's such ability. The Ant's lending is mainly to the SMEs and the individuals though. The borrowings from these SMEs and individuals are much smaller than those from the state-owned-corporations but they are vast in numbers. Despite the total lending amount which was taken by the Ant from the SOBs does not really endanger the latter but who will be happy to see one's business is shared by someone else especially when the business climate is not good? The Ant has hurt the interests of the beneficiary controlling families behind the SOBs. 

On the other hand, Alibaba together with the Ant, one focuses on the marketing and the other one on the financing just forms a business empire putting a vast numbers of SMEs and the people related under its umbrella. This business empire could become a formidable force which can rock the governance of the nation, especially when the leader of the business empire is too bold. 

This Ant must be taken down! 

Then what about the Man?