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Will Jack Ma reappear?

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Bhimashankar Sanga
Bhimashankar Sanga
Elearning Evangelist, Occasional Writer & Full-Time Coach, Obsessive-Compulsive Thinker, Unapologetically Idealistic, Infoholic, Sybaritic.

In Communist China, the government controls businesses. In the rest of the world, businesses control the government. In China they have a saying “tallest tree catches the most wind”. The tallest tree here is the government and the rich have to be most loyal to the ruling party. China is anything but a Dictatorship of the Proletariat, they have many members of the bourgeoisie in their assemblies. In China, say exactly what the CCP wants you to say. It’s more like Russia’s “kiss the ring and know your place”. Never try to eat the government’s lunch. Banking will and always be part of the central authority of the government, anywhere you go. Jack Ma got a little too big for his britches when he tried to create a private unregulated banking system.

Jack Ma’s financial companies were giving out loans to everything with a pulse standing on two legs. Not everyone has a bank account in China, but everyone has an Alipay account. You could live your whole life with just an Alipay account and you’d be fine. #Alipay made huge amounts of cash for Alibaba. People didn’t trust the banks, so they were allowed to put money into their Alipay wallet. If you’re not familiar with Ant Financial, it’s basically Alipay’s financial services division that offers financial products such as loans and mutual funds. Alipay also gives you microloans of 10-15 dollars for everyday things to even larger purchases. To the point that Alipay started offering financial planning, and HISA to people. This contributed to a growing consumer debt level in young adults, which is causing a stink when 20-year-olds who can’t pay debt and families have to step in to bail them out. But the bigger picture is it’s creating something like the subprime mortgage crisis that lead to the 2008 crash. Too much bad/uncertain debt in the hands of people that should have never gotten a loan.

Ant Financial was set to IPO in late 2020, but that was called off by the Chinese government who claimed that Ant did not meet regulatory compliance. Ant borrows money from big banks and loans it out to users at a higher interest, it then packages these loans into Collateralized Debt Obligations and sells them in the secondary market. The issue with Ant Financial is that they were regulated as a tech company up until now, but the services they offer is more like a bank. Basically, the government is saying “you do what a bank does, so you should be subject to bank regulations”, but Jack is saying “Nope I’m a fintech company, not a bank”. Following the Ant Financial drama, the CCP started a crackdown on consumer loan services that were in the grey zone between fintech and banking. Jack, due to his vocal opposition, became a kind of counter example in this sweep. Jack Ma has repeatedly pissed off the powers that be and obliquely chided China’s regulatory system. From calling out bank regulators for being slow and petty at a conference recently (in front of Xi, no less) to whatever he said two years ago that compelled authorities to “suggest” he retire and give the CEO post to his number two guy.

Ant bank was a massively over-leveraged bank that threatened to go asunder with the savings of hundreds of thousands of small-time folks who were goaded into risky savings accounts with interest rates of up to 8% per month – offered through the #Alipay. Jack Ma tried to bulldoze his payday business (Ant) through the regulators, even though it definitely did not have proper financial backing and was offering extreme leverage to basically anybody. His goal was to rush the IPO of Ant as a fintech company (rather than a financial company, which comes with greater regulatory baggage and a lower market valuation).

The CCP was burnt years ago with a similar thing from the collapse in the peer-to-peer lending market, which resulted in massive societal unrest, & millions of citizens losing hundreds of billions. Jack Ma’s Ant is equally unstable and its inevitable collapse would force the central government to once again step in and bail it out. Jack Ma has been a whiny brat off-late who has been steadily eroding his own standing in the party, and the last straw was ignoring & insulting regulators while pushing forward with the #Ant#IPO. This is way more complicated than just “CCP punishes guy who criticizes CCP”.

The following billionaires went missing for some time:

Wu Xiaohui, Anbang (finance)Xiao Jianhua,

Wu Xiaohui, Anbang (finance)

Xiao Jianhua, Tomorrow Group (real estate)

Zhou Chengjian, Metersbonwe (clothing)

Guo Guangchang, Fosun (owns Club Med &Cirque du Soleil)

Lei Jie (banking/finance)

Mao Xiaofeng (banking)

Mike Poon Ho Man (aircraft leasing)

Yang Zezhu (banking/finance)

Most of those people reappeared after a month or two, but not all. Xiao Jianhua hasn’t been seen in three years. Yang Zezhu fell to his death from a 12th story apartment, after he disappeared. Police found a suicide note. The media also circle-jerked around the “disappearance” of Fan Bingbing (A-list Chinese actress) when she got in trouble for alleged tax evasion. But now that she’s back and nobody talks about it. #CCP is very sensitive to its public image and therefore it will ensure Jack Ma returns with the right mindset.

#JackMa was chosen by the communist party only because he spoke English and was one of 500 million blind loyal party members. Now he is again what he was before they appointed him -nothing. Dust in the wind. The owner of Huawei was a cell phone repair shop owner, retired low-ranking military officer, specialist for fixing broken screens of iPhone 5. China creates a new billionaire each day and they all think they are going to be next. Jack Ma will be out of sight for a while but he will be ok.

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Bhimashankar Sanga
Bhimashankar Sanga
Elearning Evangelist, Occasional Writer & Full-Time Coach, Obsessive-Compulsive Thinker, Unapologetically Idealistic, Infoholic, Sybaritic.
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