Beijing steps on Alibaba's Ant Group by forcing it to submit to same regulation as banks

Requires Alipay to open to competition but stops short of ordering company break up

China has again cracked down on Alibaba, this time by ordering its fintech arm Ant Group to become a financial holding company that is subject to tighter regulations.

Chinese regulators met with Ant Group on April 12 to lay out required business changes inspired by Beijing’s concern that technology firms acting as finance companies threaten financial stability and can create monopolies.

As a financial holding company, Ant Group would face bank-like regulations. Other Beijing-directed changes include a requirement to open its near-ubiquitous Alipay payment app to competitors, increase consumer lending operation oversight, enhance data protection and reduce the size of its money market fund Yu'eBao. The measures do not require Ant to break apart or spin out any of its businesses.

Ant Group promised full compliance. In a post to Chinese microblogging service QQ the company said: “Under the guidance of financial regulators, Ant Group will spare no effort in implementing the rectification plan, ensuring that the operation and growth of our financial-related businesses are fully compliant.”

Flags of EU and vietnam

Vietnam reveals state-run Alibaba-and-Amazon alternative, aims it at the EU


The fintech giant promised it would set up a personal credit reporting company and “return to its origin” by focusing on micro-payments.

The People's Bank of China published a transcription of a Q&A session with deputy governor Pan Gongsheng, who outlined the reasons for changes at Ant Group as follows

In terms of regulatory concepts, follow the principle of "same business, same supervision", and strive to strike a balance between promoting the development of financial technology and preventing financial risks.

The requirement to submit to more regulations appears to cap a saga that started in November 2020, when China's government prevented Ant Group from completing a record-breaking US$35bn IPO just two days before it was scheduled. Earlier this week, Alibaba itself received a US$2.8bn fine for breaking antitrust rules.

The interventions suggest Beijing is not pleased that web giants have disrupted the Communist Party's plans for control of China's economy, while showing that even celebrated Chinese entrepreneurs like Alibaba founder Jack Ma be taken down a peg. ®

Similar topics

Broader topics

Other stories you might like

  • Your snoozing iOS 15 iPhone may actually be sleeping with one antenna open
    No, you're not really gonna be hacked. But you may be surprised

    Some research into the potentially exploitable low-power state of iPhones has sparked headlines this week.

    While pretty much no one is going to utilize the study's findings to attack Apple users in any meaningful way, and only the most high-profile targets may find themselves troubled by all this, it at least provides some insight into what exactly your iOS handheld is up to when it's seemingly off or asleep. Or none of this is news to you. We'll see.

    According to the research, an Apple iPhone that goes asleep into low-power mode or is turned off isn't necessarily protected against surveillance. That's because some parts of it are still operating at low power.

    Continue reading
  • China will produce one in five of the chips it uses in 2026, says analyst
    Well short of planned 70 percent domestic capacity

    China’s integrated circuit (IC) production has failed to keep pace with its appetite for silicon, with market research firm IC Insights predcicting the nation will produce only one in five ICs it uses in 2026.

    That figure is a increase from 2021's one in six, and reflects eight percent compound annual growth rate from 2021 to 2026. But it means China will miss its own targets for locally-made-and-consumed silicon.

    “Although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow, or ever follow” said the firm in a bulletin on Wednesday.

    Continue reading
  • Tencent happily parting ways with loss-making cloud customers
    Cutting costs across sprawling business as COVID makes life hard in China

    Chinese tech giant Tencent has recorded its first ever quarter-to-quarter revenue fall, warned that COVID-19 lockdowns will hurt messing with its business, and cautioned against assumptions that Beijing is ready to enthusiastically support tech companies.

    On its Q1 2022 earnings call yesterday, the company offered more explanation of its shifting cloud strategy.

    Chief strategy officer James Mitchell told investors the company is pleased to have shown loss-making cloud customers the door, and “proactively scaled back … deeply discounted infrastructure-only contracts for basic services such as cloud compute and content delivery network.” Projects that had high costs and/or relied on sub-contractors have also been scaled back.

    Continue reading

Biting the hand that feeds IT © 1998–2022