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Northeast Asia

China’s move against Ant Group is a gift to its critics

China’s decision to clamp down on Ant Group has derailed an IPO of at least $34 billion, despite execution being finished last week. The move appears to be little more than political muscle-flexing by Beijing. The real winners will be the country’s critics.

Ant Group’s IPO was supposed to be a crowning achievement for Chinese business.

The deal was set to be the largest in history, easily overshadowing Saudi Aramco’s $29.4 billion listing. It was a showcase of one of the largest, most exciting companies in China. It was proof that China had the clout to go it alone, ignoring US pressure on the company. It was even a clear statement of China’s ability to balance competing interests: the deal was split between the Hong Kong stock exchange and the Star board, an upstart technology bourse in Shanghai.

Those achievements have now been delayed, perhaps for good.

On Monday, Ant founder and majority shareholder Jack Ma, alongside two other senior executives, was called in for a meeting with the country’s most powerful regulators – the central bank and regulators for banking and insurance, the securities market and foreign exchange. The precise content of the discussion remains unclear but the following day Ant pulled its IPO, citing a “material change”.

It was already clear that Ant was facing a tougher regulatory environment. China’s central bank and its banking and insurance regulator said on Monday that they were planning to tighten rules on the microfinance market, where Ant is a major player.

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