6 ms·

China plans to break up Ant's Alipay and force creation of separate loans app

74 points by mikhael 5y ago

toomuchtodo 5y ago
Financial Times piece: https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5d79 https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5... | https://archive.fo/t90No https://archive.fo/t90No
tcbawo 5y ago
With a majority state-owned joint venture
endisneigh 5y ago
Honestly - why should rando companies skim off the top of the entire country's economy? I'm surprised more countries aren't just nationalizing things that are a drain. Why is something like PayPal not nationalized? Debit cards? The list goes on.
- karmasimida 5y ago
  Nationalization is expensive and inefficient though. With nationalization, PayPal won't even be created in the first place. Because why? The purpose of nationalized institutions is not chasing profits, and let me tell you, they hate changes unless they absolutely have to. So for Alipay, even China is not going to nationalize it to the point that it becomes a state apparatus, the Chinese government would like to enforce control when they want to, and makes it obvious to Ant's factual owners.
- JumpCrisscross 5y ago
  > Why is something like PayPal not nationalized? Debit cards? The list goes on. This is a good way to not get future PayPals or debit cards. The fact that even Beijing isn't taking that path should show how extreme it is.
  - shuntress 5y ago
    What is a "future PayPal or debit card"? Are you trying to say that publicly-funded research cannot lead to any technological advancement?
    - elefanten 5y ago
      Publicly-funded (basic) research doesn’t result in innovative, competitive and successful businesses forming to serve various needs. In other words, society needs more than just basic research and bureaucratic administration of basic government services.
      - badRNG 5y ago
        The goal here wouldn't be to form a successful business, but to serve needs directly. Creative, innovative people will continue to create and innovate as long as they are employed specifically to those ends.
        deleted 5y ago
        [deleted]
        z2 5y ago
        There are probably business journals that put this better, but the issue may not be that these creative people will vanish if we directed them to serve a need. Rather, the issue may involve willingness to take risks to try crazy new ideas because the potential reward is great. Ownership in the results may be much more powerful than a static unchanging government salary. I'm not sure how this may translate to an organization level, but suspect similar dynamics at play, along with a good amount of competition to move things along (edit: that is, when there are multiple private entities vs a single state entity doing the directing).
        badRNG 5y ago
        I don't really see how an engineer at Blue Origin is more willing to take risks or has more ownership in the results than say an engineer at NASA JPL. If anything the engineer at NASA has more ownership since their work is in the public interest, rather than making some billionaire marginally richer.
- baybal2 5y ago
  > I'm surprised more countries aren't just nationalizing things that are a drain. Ask India, Pakistan, and Banglades how the era of mass nationalisations went for them in the seventies. It went nowhere. In each respective country, the two decades of economic progress since the independence was undone. It's a very remarkable test case for how nationalisation worked in three drastically different economies: relatively free market Pakistan, a socialism-lite India, going more hardcore, and a post-war blank sheet economy of Bangladesh.
  - shuntress 5y ago
    You heard it here first: We need to privatize roads, mail, DNS, TCP, etc. These shared systems are clearly hindering progress.
    - elefanten 5y ago
      This is not what gp described. Why don’t you provide an example of nationalized industry performing well?
      - fy20 5y ago
        In Europe most passenger railway companies are nationalised (or at least heavily controlled by state owned entities), and rail transport in Europe is arguably much better than in the US.
        gruez 5y ago
        ...and definitely not say, higher population density and/or government policy.
        simion314 5y ago
        Maybe if you don't include deserts and Alaska in the density calculations you would get comparable numbers. - Why don't big american cities have trolleybus? - Because density , imagine putting those buses in the desert, would be stupid - But why not put the infrastracuture starting from high density areas ? - You are making sense now, let me find other excuse ... it is because culture/freedom/short history/ the constitution , the yellow party - I don't have time to logicaly analize all those excuses, next time maybe
- mrigor 5y ago
  India has NPCI https://www.npci.org.in/who-we-are/about-us https://www.npci.org.in/who-we-are/about-us
- bostonsre 5y ago
  I agree that companies shouldn't be allowed to monopolize and rent seek, but I'm not sure nationalization is the answer. It isn't done because of the same reasons communism fails. Innovation halts, corruption creeps in, and it becomes bloated and worse for the end user than when it started.
  - elliekelly 5y ago
    People always say this but it's simply not true. My local water authority has been operating for decades and I've never heard a single person complain. Ditto for the municipal gas company. I can't say the same for the local electric company (owned by Exelon) or the local cable company (Comcast) or the local garbage collection service (owned by WM). If anyone is guilty of "bloat" that harms the end user it seems to me it's the private companies.
    - kwere 5y ago
      ccp is known for a lot of things, effective managment is not one of these
    - lordentropy 5y ago
      Capitalism and free enterprise succeed due to competition. Your local electric company and the local cable company probably are state sanctioned monopolies.
    - bostonsre 5y ago
      > People always say this but it's simply not true. There are also cases where it does not go well, e.g. flint. Those companies you list suck because they have monopolies which I think is a separate issue. Also, a local municipal organization has a ton less bureaucracy, there is not much incentive for corruption, and the result of corruption won't tank the economy. A national bank would be a whole different ball game. If a guy gives his friend's company free water, so what. if a guy who works at a national bank gives his friend's shitty company a sweetheart loan that he knows they won't be able to pay back, that will have a lot more dire consequences if repeated over and over.
- nomay 5y ago
  >nationalizing things that are a drain Oh don't worry about that, Chinese banks have been making risk-free money for decades, propped up its stratospheric property bubble and almost exclusively lend to SOEs (these SOEs then mark up it and re-lend or bulk-buy condo towers, shadowbanking at its finest) and avoid the private sector, probably no banks elsewhere are more of a leech than them. SOEs themselves are ruthless leeches.
- deleted 5y ago
  [deleted]
- toomuchtodo 5y ago
  The US is working towards Instant Payment infra that will likely end up obviating the need for Paypal and debit cards, no nationalization required. It's a tragedy instant payments haven't been a utility for this long. https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa... https://www.pymnts.com/news/faster-payments/2021/five-banks-test-fednow-real-time-payments-system/ https://www.pymnts.com/news/faster-payments/2021/five-banks-... https://www.frbservices.org/financial-services/fednow/blog/updated-fednow-service-launch-to-2023.html https://www.frbservices.org/financial-services/fednow/blog/u... https://www.frbservices.org/financial-services/fednow/instant-payments-education/trending-world-faster-instant-payments.html https://www.frbservices.org/financial-services/fednow/instan...
- lordentropy 5y ago
  Yeah, nationalize all the innovative companies and let the bureaucrats run them. You then end up with a system designed in the 1970s and rarely updated - https://en.wikipedia.org/wiki/ACH_Network https://en.wikipedia.org/wiki/ACH_Network. In the US, it takes 4-10 days to send an ACH.
  - sinyug 5y ago
    I am all for competition. But only till companies reach a certain size. It is ridiculous to let private companies like Mastercard and Visa collect a percentage of every single electronic transaction. We have had a government-run payments network[1] in India for a long time that all banks hook into and it works very well. [1] https://en.wikipedia.org/wiki/National_Payments_Corporation_of_India https://en.wikipedia.org/wiki/National_Payments_Corporation_...
  - p_l 5y ago
    Umm... ACH is apparently private, even if it took serious inspiration from initiatives used by federal government. I think a better question is why, for all supposed innovation that is brought by private enterprise, the country with seemingly most privatised financial sector has some of the most backwards, arse-end-of-nowhere, the devil has said goodnight few stations before payments situation? One hypothesis is that in such situation, the vendors are not interested in cooperation if they can operate nationwide, and instead try to get as much lock-in in spite of what's better for customer, and thus aren't interested in faster general payments system. I mean, seriously, Poland despite all the crap we had to sort out in 1990s managed to build a faster and more reliable system by using file transfer (mostly by FTPS, but used to be X.25 and optionally floppies!), scheduled jobs (essentially cron) and these days basic PKI file signing. It worked well enough that cheques were phased out by I think 2002 (as in "no, there are no cheques supported anywhere"). And the capability floor it set means that any private alternative has to figure something that adds value - for example, instant online settlement (ever paid for pizza by wire? I do, often), shortcode-plus-phone quick transfers (essentially a common enough variant of the previous that even works at POS).
crazypyro 5y ago
Is this not just the continued dismantling of Jack Ma's Ant? This company is completely doomed because the founder is basically treated as an enemy of the state. "China plans to break up Ant" could have been a headline nearly every week/month since Jack Ma dropped out of the public sphere.
- TMWNN 5y ago
  >"China plans to break up Ant" could have been a headline nearly every week/month since Jack Ma dropped out of the public sphere. Has Ma reappeared yet to publicly thank the Chinese state for breaking up his company?

74 points by mikhael 5y ago

Financial Times piece: https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5d79 https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5... | https://archive.fo/t90No https://archive.fo/t90No

tcbawo 5y ago

With a majority state-owned joint venture

endisneigh 5y ago

Honestly - why should rando companies skim off the top of the entire country's economy? I'm surprised more countries aren't just nationalizing things that are a drain. Why is something like PayPal not nationalized? Debit cards? The list goes on.

karmasimida 5y ago
Nationalization is expensive and inefficient though. With nationalization, PayPal won't even be created in the first place. Because why? The purpose of nationalized institutions is not chasing profits, and let me tell you, they hate changes unless they absolutely have to. So for Alipay, even China is not going to nationalize it to the point that it becomes a state apparatus, the Chinese government would like to enforce control when they want to, and makes it obvious to Ant's factual owners.
JumpCrisscross 5y ago
> Why is something like PayPal not nationalized? Debit cards? The list goes on. This is a good way to not get future PayPals or debit cards. The fact that even Beijing isn't taking that path should show how extreme it is.
- shuntress 5y ago
  What is a "future PayPal or debit card"? Are you trying to say that publicly-funded research cannot lead to any technological advancement?
  - elefanten 5y ago
    Publicly-funded (basic) research doesn’t result in innovative, competitive and successful businesses forming to serve various needs. In other words, society needs more than just basic research and bureaucratic administration of basic government services.
    - badRNG 5y ago
      The goal here wouldn't be to form a successful business, but to serve needs directly. Creative, innovative people will continue to create and innovate as long as they are employed specifically to those ends.
      - deleted 5y ago
        [deleted]
      - z2 5y ago
        There are probably business journals that put this better, but the issue may not be that these creative people will vanish if we directed them to serve a need. Rather, the issue may involve willingness to take risks to try crazy new ideas because the potential reward is great. Ownership in the results may be much more powerful than a static unchanging government salary. I'm not sure how this may translate to an organization level, but suspect similar dynamics at play, along with a good amount of competition to move things along (edit: that is, when there are multiple private entities vs a single state entity doing the directing).
        badRNG 5y ago
        I don't really see how an engineer at Blue Origin is more willing to take risks or has more ownership in the results than say an engineer at NASA JPL. If anything the engineer at NASA has more ownership since their work is in the public interest, rather than making some billionaire marginally richer.
baybal2 5y ago
> I'm surprised more countries aren't just nationalizing things that are a drain. Ask India, Pakistan, and Banglades how the era of mass nationalisations went for them in the seventies. It went nowhere. In each respective country, the two decades of economic progress since the independence was undone. It's a very remarkable test case for how nationalisation worked in three drastically different economies: relatively free market Pakistan, a socialism-lite India, going more hardcore, and a post-war blank sheet economy of Bangladesh.
- shuntress 5y ago
  You heard it here first: We need to privatize roads, mail, DNS, TCP, etc. These shared systems are clearly hindering progress.
  - elefanten 5y ago
    This is not what gp described. Why don’t you provide an example of nationalized industry performing well?
    - fy20 5y ago
      In Europe most passenger railway companies are nationalised (or at least heavily controlled by state owned entities), and rail transport in Europe is arguably much better than in the US.
      - gruez 5y ago
        ...and definitely not say, higher population density and/or government policy.
        simion314 5y ago
        Maybe if you don't include deserts and Alaska in the density calculations you would get comparable numbers. - Why don't big american cities have trolleybus? - Because density , imagine putting those buses in the desert, would be stupid - But why not put the infrastracuture starting from high density areas ? - You are making sense now, let me find other excuse ... it is because culture/freedom/short history/ the constitution , the yellow party - I don't have time to logicaly analize all those excuses, next time maybe
mrigor 5y ago
India has NPCI https://www.npci.org.in/who-we-are/about-us https://www.npci.org.in/who-we-are/about-us
bostonsre 5y ago
I agree that companies shouldn't be allowed to monopolize and rent seek, but I'm not sure nationalization is the answer. It isn't done because of the same reasons communism fails. Innovation halts, corruption creeps in, and it becomes bloated and worse for the end user than when it started.
- elliekelly 5y ago
  People always say this but it's simply not true. My local water authority has been operating for decades and I've never heard a single person complain. Ditto for the municipal gas company. I can't say the same for the local electric company (owned by Exelon) or the local cable company (Comcast) or the local garbage collection service (owned by WM). If anyone is guilty of "bloat" that harms the end user it seems to me it's the private companies.
  - kwere 5y ago
    ccp is known for a lot of things, effective managment is not one of these
  - lordentropy 5y ago
    Capitalism and free enterprise succeed due to competition. Your local electric company and the local cable company probably are state sanctioned monopolies.
  - bostonsre 5y ago
    > People always say this but it's simply not true. There are also cases where it does not go well, e.g. flint. Those companies you list suck because they have monopolies which I think is a separate issue. Also, a local municipal organization has a ton less bureaucracy, there is not much incentive for corruption, and the result of corruption won't tank the economy. A national bank would be a whole different ball game. If a guy gives his friend's company free water, so what. if a guy who works at a national bank gives his friend's shitty company a sweetheart loan that he knows they won't be able to pay back, that will have a lot more dire consequences if repeated over and over.
nomay 5y ago
>nationalizing things that are a drain Oh don't worry about that, Chinese banks have been making risk-free money for decades, propped up its stratospheric property bubble and almost exclusively lend to SOEs (these SOEs then mark up it and re-lend or bulk-buy condo towers, shadowbanking at its finest) and avoid the private sector, probably no banks elsewhere are more of a leech than them. SOEs themselves are ruthless leeches.
deleted 5y ago
[deleted]
toomuchtodo 5y ago
The US is working towards Instant Payment infra that will likely end up obviating the need for Paypal and debit cards, no nationalization required. It's a tragedy instant payments haven't been a utility for this long. https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa... https://www.pymnts.com/news/faster-payments/2021/five-banks-test-fednow-real-time-payments-system/ https://www.pymnts.com/news/faster-payments/2021/five-banks-... https://www.frbservices.org/financial-services/fednow/blog/updated-fednow-service-launch-to-2023.html https://www.frbservices.org/financial-services/fednow/blog/u... https://www.frbservices.org/financial-services/fednow/instant-payments-education/trending-world-faster-instant-payments.html https://www.frbservices.org/financial-services/fednow/instan...
lordentropy 5y ago
Yeah, nationalize all the innovative companies and let the bureaucrats run them. You then end up with a system designed in the 1970s and rarely updated - https://en.wikipedia.org/wiki/ACH_Network https://en.wikipedia.org/wiki/ACH_Network. In the US, it takes 4-10 days to send an ACH.
- sinyug 5y ago
  I am all for competition. But only till companies reach a certain size. It is ridiculous to let private companies like Mastercard and Visa collect a percentage of every single electronic transaction. We have had a government-run payments network[1] in India for a long time that all banks hook into and it works very well. [1] https://en.wikipedia.org/wiki/National_Payments_Corporation_of_India https://en.wikipedia.org/wiki/National_Payments_Corporation_...
- p_l 5y ago
  Umm... ACH is apparently private, even if it took serious inspiration from initiatives used by federal government. I think a better question is why, for all supposed innovation that is brought by private enterprise, the country with seemingly most privatised financial sector has some of the most backwards, arse-end-of-nowhere, the devil has said goodnight few stations before payments situation? One hypothesis is that in such situation, the vendors are not interested in cooperation if they can operate nationwide, and instead try to get as much lock-in in spite of what's better for customer, and thus aren't interested in faster general payments system. I mean, seriously, Poland despite all the crap we had to sort out in 1990s managed to build a faster and more reliable system by using file transfer (mostly by FTPS, but used to be X.25 and optionally floppies!), scheduled jobs (essentially cron) and these days basic PKI file signing. It worked well enough that cheques were phased out by I think 2002 (as in "no, there are no cheques supported anywhere"). And the capability floor it set means that any private alternative has to figure something that adds value - for example, instant online settlement (ever paid for pizza by wire? I do, often), shortcode-plus-phone quick transfers (essentially a common enough variant of the previous that even works at POS).

crazypyro 5y ago

Is this not just the continued dismantling of Jack Ma's Ant? This company is completely doomed because the founder is basically treated as an enemy of the state. "China plans to break up Ant" could have been a headline nearly every week/month since Jack Ma dropped out of the public sphere.

TMWNN 5y ago
>"China plans to break up Ant" could have been a headline nearly every week/month since Jack Ma dropped out of the public sphere. Has Ma reappeared yet to publicly thank the Chinese state for breaking up his company?