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Afaik, the Chinese government is worried because of the size of the debt managed by Ant (45 billion) in comparison to their own capital (450 million, 1%). The w
by Udik 6y ago
Afaik, the Chinese government is worried because of the size of the debt managed by Ant (45 billion) in comparison to their own capital (450 million, 1%). The whole risk is offloaded to good old banks which are then exposed to an excessive risk. The government is planning to change the law to set a minimum threshold of 30% of capital over managed debt, and this is the reason the IPO was withdrawn: the law is about to be made much more stringent and this changes the valuation of the company entirely.
- freewizard 6y agoThis aligns with what I've heard, and it's not surprising for Chinese govt to let an industry grow by itself then suddenly put a hard brake on it by imposing a set rules with its heavy hands. The difference is this time the victim is much larger and visible than anyone in the past. This mode of operation was not started by Xi, but no doubt Xi's gov't made it less transparent and more brutal to the business and investors.
- 8note 6y agoThat sounds like general government? Is this different from banning lead from gasoline?
- cynusx 6y agoSure but there's a difference between what a government said why they did it and why they actually did it. The regulator could have stepped in a year ago rather then a few days after Jack Ma's comments.