Chinese fintech: what the experts think
● Ant music
There’s hope again for the Chinese payments giant
Ant Group, whose massive flotation was scuppered by Chinese regulators in the autumn, said BBC Business. Last week, founder Jack Ma made his “first appearance” since the crackdown on his empire, which includes the e-commerce behemoth Alibaba. Now, the governor of the People’s Bank of China (PBOC), Gang Yi, “has signalled that the door remains open” for Ant’s market debut.
● Tencent’s tenacity
Some saw the Chinese government’s action against Ma “as a vengeful Communist Party lashing out at the outspoken businessman”. But Beijing has been “grappling with new technologies and their possible implications for the stability of the Chinese financial system”. Indeed, action was almost inevitable after Ant captured such a large chunk of the Chinese payments and wealth management market, tech expert Shazeda Ahmed told Al Jazeera. “I always felt like [Ant Group] were in the position the PBOC wanted to be in.” But while the clampdown has taken the wind out of Ant’s sails, shares in arch-rival Tencent have surged on the
Hong Kong exchange, noted the BBC. The company is now nearing a “trilliondollar valuation” and founder Pony Ma has “leapfrogged” Jack Ma (no relation) to become China’s second-wealthiest man.
● Bubble fears
Fuelled by the upward ascent of tech and e-commerce stocks, mainland China’s CSI 300 index of Shanghai and Shenzhen-listed shares “hit its highest level since the global financial crisis” this month, said Thomas Hale and Hudson Lockett in the FT. Some officials at the central bank fear that too much “loose liquidity could inflate an asset bubble”. Hence, the PBOC’s move this week to tighten conditions by withdrawing some Rmb78bn ($12bn) from the financial system. Mainland-listed stocks duly dropped 2%. But traders report that it’s hard to kill the momentum. Nearly $34bn has flowed from the mainland into Hong Kong’s stock market so far in 2021, according to Bloomberg data: much of it into rocketing tech shares like Tencent and the shopping platform Meituan. As Andy Maynard of China Renaissance Securities concludes: the mood remains “totally... intact in terms of its positivity”. In China’s stock markets, euphoria still rules.