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Would love to get a transcript of exactly what he said at a forum a few months ago, from Quartz: Speaking at a forum attended by some of China’s most powerful

Would love to get a transcript of exactly what he said at a forum a few months ago, from Quartz: Speaking at a forum attended by some of China’s most powerful figures in politics and finance, Ma heavily criticized the “pawnshop mentality” of Chinese banks, and accused global authorities’ old-school financial regulation of slowing down innovation. The criticism eventually reached Chinese president Xi Jinping, who was furious about the remarks and personally ordered the suspension, according to the Wall Street Journal. https://qz.com/1946723/theres-no-place-for-a-jack-ma-in-todays-china/amp/ https://qz.com/1946723/theres-no-place-for-a-jack-ma-in-toda... A couple of other interviews he’s been hammering away at the stagnant (according to him) Chinese banks, and the regulators basically snuffed him by forcing his Ant payment group to ‘stick to just payments’ (he wanted it to give loans via the system, becoming a type of bank in itself). ^ I can see how they would be afraid of this. I think Alibaba is trying to force sellers to only sell on Alibaba exclusively (not allowing them to sell on other sites if they want to sell on Alibaba). If Alipay gives loans, I could see how Ma might make it so that available credit is usable on Alibaba only, further tightening the hold. Jack Ma might be the one trying to be monopolistic here, but I’d love for someone with first-hand experience to speak to what’s going on over there. Or maybe we’re all just sheep and Chinese insiders know how to shift stock prices with nonsense because they can and buy up shares. Those companies are increasingly being listed on global markets and all the CCP has to do is breath ‘eh, maybe no capitalism’, and the stocks move. SEC can’t stop that.

Barrin92 6y ago
bigger reason than Alibaba's market control is the fact that the Chinese government is absolutely allergic to unsecured debt. China over the last few years has desperately attempted, and with some sucess, cleaned up parts of its financial sector because the government fears few things more than a financial crisis, it's something they learned when they came out ahead in 2008/2009. relevant read: https://www.nakedcapitalism.com/2020/11/china-takes-step-against-securitization-consumer-borrowing-with-suspension-of-ant-ipo.html https://www.nakedcapitalism.com/2020/11/china-takes-step-aga...
- alan-crowe 6y ago
  I remember reading https://marginalrevolution.com/ https://marginalrevolution.com/ back around the time of the 2008 financial crisis. Tyler Cowen was emphasizing the futility of trying to regulate the financial system. The banks paid big money to hire the smartest guys; the regulators had to make do with who they could get. The Collateralized Debt Obligation genie was out of the bottle and you couldn't get it back in. One has to wonder how that looks from China. The government of the USA looks impressively powerful, yet it lost control of the financial sector. Some players in the American financial sector believed in CDOs and lost their own money. Others saw it as just another scam, with private profits and socialized losses. To Chinese eyes that probably looks like corruption with extra steps. In particular, the US government could retain some legitimacy with a "Wall Street" versus "Main Street" narrative. Sure, Uncle Sam got ripped off by bankers, but what can you do? The Chinese government is worried that corruption will cause it to lose its legitimacy with the Chinese people. But the Chinese people won't let the Chinese government away with the "It is the Banksters not the Officials." line. They don't see the top people as two warring clans, with Bankers beyond the reach of discipline by Officials. So the Chinese government has to look several moves ahead. First come the CDOs. As the bubble builds the government finds that it is trapped: too many people are dependent on easy money for the government to pop the bubble. As the bubble inflates, the government tries to regulate its way out of trouble by deflating the CDO bubble. Here the Chinese government has second-mover advantage. It can see that the US government lost control and could not do anything, not even close. Eventually the bubble pops, leading to a financial crisis and the Chinese government gets the blame. It must have noticed that the US government didn't manage to shift the blame with long prison sentences for bankers, the US government had somehow lost control. So I don't think that "absolutely allergic to unsecured debt." is quite it. My guess is that the Chinese government sees the US government losing control of the financial sector, years (ten? twenty?) ahead of the financial sector misbehaving and causing a government-shaking crisis. The Chinese government don't want finance building itself up as a separate (and irresponsible) power center. The American experience is that this happens slowly, little by little, but on a ratchet. A ratchet with a magic pawl that the government cannot lift. So the Chinese government has to nip it in the bud.
  - 6y ago
powerapple 6y ago
Basically Jack said that the banks are working in 'pawnshop mentality', not using the data collected to evaluate loans. With Ant you can get loans in 10 seconds. He also said the global financial regulation is for countries with financial sector, and China's problem is not about regulation, is about there is nothing to regulate. The new regulation on P2P financing requires Ant to put 30% of the loans with its own money. I can see from Ant's point of view, their loan is super safe (with all the taobao data and AliPay data collected). Ant group will create a financial entity to put its P2P business under banking regulation. Another interesting thing is that Ant's loans mostly go to TaoBao sellers (small businesses), with their data, which are super safe from their point of view. The problem is that from regulators' point of view, maybe it is not obvious or it is hard to regulate it with one exception.
yorwba 6y ago
> Would love to get a transcript of exactly what he said at a forum a few months ago Transcript: https://sfl.global/news_post/mayunshanghaiwaitanjinrongluntanyanjiangquanwenwushanjian/ https://sfl.global/news_post/mayunshanghaiwaitanjinronglunta... Translation: https://interconnected.blog/jack-ma-bund-finance-summit-speech/ https://interconnected.blog/jack-ma-bund-finance-summit-spee...

Barrin92 6y ago

bigger reason than Alibaba's market control is the fact that the Chinese government is absolutely allergic to unsecured debt. China over the last few years has desperately attempted, and with some sucess, cleaned up parts of its financial sector because the government fears few things more than a financial crisis, it's something they learned when they came out ahead in 2008/2009. relevant read: https://www.nakedcapitalism.com/2020/11/china-takes-step-against-securitization-consumer-borrowing-with-suspension-of-ant-ipo.html https://www.nakedcapitalism.com/2020/11/china-takes-step-aga...

alan-crowe 6y ago
I remember reading https://marginalrevolution.com/ https://marginalrevolution.com/ back around the time of the 2008 financial crisis. Tyler Cowen was emphasizing the futility of trying to regulate the financial system. The banks paid big money to hire the smartest guys; the regulators had to make do with who they could get. The Collateralized Debt Obligation genie was out of the bottle and you couldn't get it back in. One has to wonder how that looks from China. The government of the USA looks impressively powerful, yet it lost control of the financial sector. Some players in the American financial sector believed in CDOs and lost their own money. Others saw it as just another scam, with private profits and socialized losses. To Chinese eyes that probably looks like corruption with extra steps. In particular, the US government could retain some legitimacy with a "Wall Street" versus "Main Street" narrative. Sure, Uncle Sam got ripped off by bankers, but what can you do? The Chinese government is worried that corruption will cause it to lose its legitimacy with the Chinese people. But the Chinese people won't let the Chinese government away with the "It is the Banksters not the Officials." line. They don't see the top people as two warring clans, with Bankers beyond the reach of discipline by Officials. So the Chinese government has to look several moves ahead. First come the CDOs. As the bubble builds the government finds that it is trapped: too many people are dependent on easy money for the government to pop the bubble. As the bubble inflates, the government tries to regulate its way out of trouble by deflating the CDO bubble. Here the Chinese government has second-mover advantage. It can see that the US government lost control and could not do anything, not even close. Eventually the bubble pops, leading to a financial crisis and the Chinese government gets the blame. It must have noticed that the US government didn't manage to shift the blame with long prison sentences for bankers, the US government had somehow lost control. So I don't think that "absolutely allergic to unsecured debt." is quite it. My guess is that the Chinese government sees the US government losing control of the financial sector, years (ten? twenty?) ahead of the financial sector misbehaving and causing a government-shaking crisis. The Chinese government don't want finance building itself up as a separate (and irresponsible) power center. The American experience is that this happens slowly, little by little, but on a ratchet. A ratchet with a magic pawl that the government cannot lift. So the Chinese government has to nip it in the bud.
- 6y ago

powerapple 6y ago

Basically Jack said that the banks are working in 'pawnshop mentality', not using the data collected to evaluate loans. With Ant you can get loans in 10 seconds. He also said the global financial regulation is for countries with financial sector, and China's problem is not about regulation, is about there is nothing to regulate. The new regulation on P2P financing requires Ant to put 30% of the loans with its own money. I can see from Ant's point of view, their loan is super safe (with all the taobao data and AliPay data collected). Ant group will create a financial entity to put its P2P business under banking regulation. Another interesting thing is that Ant's loans mostly go to TaoBao sellers (small businesses), with their data, which are super safe from their point of view. The problem is that from regulators' point of view, maybe it is not obvious or it is hard to regulate it with one exception.

yorwba 6y ago

> Would love to get a transcript of exactly what he said at a forum a few months ago Transcript: https://sfl.global/news_post/mayunshanghaiwaitanjinrongluntanyanjiangquanwenwushanjian/ https://sfl.global/news_post/mayunshanghaiwaitanjinronglunta... Translation: https://interconnected.blog/jack-ma-bund-finance-summit-speech/ https://interconnected.blog/jack-ma-bund-finance-summit-spee...