Ant Group, the online finance affiliate of the Chinese e-commerce giant Alibaba, announced a sweeping overhaul of its business on Monday in response to demands from China’s government, which is moving swiftly to curb the power of the country’s internet giants.
Beijing’s campaign has taken the corporate empire of Jack Ma, Alibaba’s billionaire co-founder and Ant’s controlling shareholder, as an early major target. On Saturday, China’s antitrust authority fined Alibaba $2.8 billion for abusing its dominance in digital retail — a record amount for violations of the country’s antimonopoly law.
As part of what both Ant Group and Chinese officials called a “rectification plan,” the company on Monday said it would apply to set up as a financial holding company, which would bring closer supervision and requirements that it hold onto more money that it might otherwise lend or put to profitable use.
Ant also said it would change the way it collects and uses personal information to improve data security and prevent abuse. And it said it would improve corporate governance to better adhere to rules about fair competition.
said in a statement. “Using the rectification as an opportunity, Ant Group will reinforce our commitment to serve consumers, small businesses and the real economy.”
Chinese officials forced Ant to call off its blockbuster initial public offering last November, mere days before its shares had been expected to debut. A month later, regulators ordered Ant to correct what they called a litany of failings in its business, which includes a range of financial services, from payments to credit, that are offered through its Alipay app.
Alipay’s user base of more than 700 million people in China gives Ant huge sway within the country’s financial system.
China first said last September that companies owning two or more financial businesses would have to register as financial holding companies and be subject to increased government oversight. In a news briefing at the time, an official at China’s central bank named Ant as one of several companies that would likely have to restructure under the new rules.
The aim, officials said, is to better monitor systemic risks that have arisen as more nonfinancial companies have “blindly” entered the financial industry.
China on Saturday said it was imposing a record $2.8 billion fine on the e-commerce titan Alibaba for monopolistic business practices, the government’s toughest action to date in its campaign to regulate the country’s internet giants more closely.
Beijing’s market watchdog began investigating Alibaba in December for potential antitrust violations including preventing merchants from selling their goods on other shopping platforms. On Saturday, the regulator said its investigation had concluded that Alibaba had hindered competition in online retail in China, affected innovation in the internet economy and harmed consumers’ interests.
The fine on Alibaba, one of China’s most valuable private companies, exceeds the $975 million antitrust penalty that the Chinese government imposed on Qualcomm, the American chip giant, in 2015. Even so, it is unlikely to leave a substantial dent on Alibaba’s fortunes. The regulator said the fine represented 4 percent of Alibaba’s domestic sales in 2019. The group reported profits of more than $12 billion in the last three months of 2020 alone.
Alibaba said in a statement that it would accept the penalty “sincerely” and would strengthen its internal systems “to better carry out its social responsibilities.”
proposed updating the country’s antimonopoly law with a new provision for large internet platforms such as Alibaba’s. In November, officials halted the plans of Alibaba’s sister company, the finance-focused Ant Group, to go public and tightened oversight of internet finance.
In December, it opened the antimonopoly investigation into Alibaba — a startling turn in the fortunes of Jack Ma, Alibaba’s co-founder, whom people in China had long held up as an icon of entrepreneurial pluck.
Skepticism about the clout of large internet companies has been on the rise in the United States and Europe, too. Western regulators have repeatedly fined Goliaths such as Google in recent years for various antitrust violations. But such penalties generally have not changed the nature of the companies’ businesses enough to mitigate concerns about their power.
The country’s internet giants, once celebrated as engines of economic vitality, are now scorned for exploiting user data, abusing workers and squelching innovation. Jack Ma, co-founder of the e-commerce titan Alibaba, is a fallen idol, with his companies under government scrutiny for the ways they have secured their grip over the world’s second-largest economy.
But there is one tech figure who has managed to keep the Chinese public in his thrall, whose mix of impish bomb-throwing and captain-of-industry bravado seems tailor-made for this time of dashed dreams and disillusionment: Elon Musk.
“He can fight the establishment and become the richest man on earth — and avoid getting beaten down in the process,” said Jane Zhang, the founder and chief executive of ShellPay, a blockchain company in Shanghai. “He’s everybody’s hope.”
fiery blast — China cannot get enough of Mr. Musk. Tesla’s electric cars are big sellers in the country, and the government’s growing space ambitions have spawned a community of fans who track SpaceX’s every launch.
trailblazer or a fraud, and examining everything from his upbringing to his taste in Beijing hot pot joints. Start-up founders swear by his belief in “first-principles thinking,” which looks for solutions by examining problems at their most fundamental level. A stack of books by Chinese authors promises to reveal the secrets of the “Silicon Valley Iron Man,” which is the nickname that seems to have stuck in China, not King of Mars or Rocket Man.
In a long thread about Mr. Musk on the question-and-answer site Zhihu, a user named Moonshake writes that most people start out full of hope but gradually accept the “mediocrity” that is their fate.
“Only a superman like Musk can move past the endless mediocrity and toward the infinite, to see the magnificence of the universe,” Moonshake writes.
Another user in the same thread says he named his son Elon to express his admiration. The user did not reply to a message seeking further comment.
claimed credit. (Mr. Musk’s reaction to the news — “Well, back to work …” — was liked 22,000 times on the Chinese social platform Weibo.)
Later that month, as Mr. Musk endorsed the run-up in GameStop shares, many in China were riveted, drawn to the drama by the same distrust of big financial institutions.
“Occupy Wall Street could never be copied in China,” said Suji Yan, an entrepreneur and investor in Shanghai. To do that, “you’d have go on the streets,” he said. Buying protest stocks is safer.
embrace of Tesla — and vice versa — when the United States and China have never trusted each other’s high-tech companies less.
marveled at the way Mr. Musk handled the country’s hard-nosed authorities. They have been more critical of the ways he has sometimes treated his own workers. He lashed out last year at California health officials who demanded that a Tesla factory there remain closed out of coronavirus concerns. The company has also come under scrutiny for workplace injuries and racial discrimination.
“He is a real dreamer and creator, yet he is also a coldblooded, self-absorbed megalomaniac,” Hong Bo, a longtime tech commentator in China who writes under the name Keso, said of Mr. Musk. “I admire his courage in breaking with outdated conventions, and yet I intensely dislike his trampling on the bottom lines of humanity.”
Mr. Musk and Tesla did not respond to emails requesting comment.
The frustration with Big Tech is part of a wider malaise in China. For many young people, decades of breakneck economic growth seem to have resulted in only fiercer competition for opportunities, less stability and less say over the direction of their lives.
On the Chinese internet, the term that has captured the mood is “involution,” previously used by anthropologists to describe agrarian societies that grew in size or complexity without becoming more advanced or productive.
The feeling among young Chinese people that they are fighting harder for a slimmer chance at material gain is leading them to hope to “reorganize life in a different way,” said Biao Xiang, who studies social change in China and is director of the Max Planck Institute for Social Anthropology in Germany.
later apologized for “excessive self-promotion.” Or Jia Yueting, who set out to best Apple in smartphones and became buried in debt. Even Mr. Ma of Alibaba appears to have helped catalyze the government’s crackdown against him by speaking a little too frankly at an event about his annoyance with regulators.
shared a stage at a Shanghai tech conference in 2019. There may never have been a more mismatched pair. Mr. Ma was earnest and engaged, at ease in the role of conference grandee. Mr. Musk was fidgety and jokey. The two did a great deal of talking right past each other. Mr. Ma said the answer to superintelligent machines was better education for humans. At this, Mr. Musk merely laughed.
In a compilation of awkward moments from the event posted on the video site Bilibili, the comments are brutal, mostly to Mr. Ma.
“This is the person who in China was once looked up to as a god,” one person wrote. “In the presence of a real master, he is like a performing monkey.”