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The Ant Group is planning a major revamp in response to pressure from Chinese financial regulators, just three months after Jack Ma’s outspoken remarks against them. New antitrust rules concerning tech firms went into effect on Sunday. While Ma’s critical speech may have been the tipping point for the government to rein in Big Tech, there have been long-standing economic, social, and industrial policy issues that merit the government’s action. In fact, Beijing’s recent efforts to strengthen antitrust regulation in the tech sector are motivated by a larger goal: to become a technology superpower and achieve self-sufficiency so that China no longer needs to rely on the West.

Why Is China Cracking Down on Alibaba? 

Project Syndicate, Feb 2, 2021

The Chinese authorities' antitrust action against the e-commerce giant appears arbitrary. The perception that the same business practices are treated in drastically different ways when policy priorities shift will not bolster investor confidence in China’s thriving internet firms. HONG KONG – Since the Chinese authorities suddenly halted fintech conglomerate Ant Group’s planned initial public offering in autumn 2020, its parent company, e-commerce king Alibaba, has been facing harsh regulatory scrutiny. On Christmas Eve, China’s antitrust authority announced that it was investigating the firm’s exclusive business practices. And Alibaba’s founder, Jack Ma, recently eased concerns regarding his fate by appearing in public for the first time since last October, when he delivered a speech criticizing financial regulation in China.

The United States and China are now locked in a dangerous legal war. On Jan. 9, China's Ministry of Commerce issued new rules to block its companies and citizens from having to comply with "unjustified"

foreign laws and measures in an attempt to counter increasingly aggressive U.S. sanctions against Chinese businesses and individuals. The purpose of this blocking statute, similar to other countermeasures such as the "unreliable entity list" that China implemented last year, is more bark than bite. It is hardly a surprise that China has adopted such a law. A long list of countries have implemented measures designed to block the applications of U.S. sanctions within their jurisdictions, including some of America's closest allies such as Canada and the United Kingdom. What is more surprising, however, is that it has taken China so long to react.

market value within just a day. The strong reaction reflected investor concern over Alibaba's future prospects amid continuing fallout from a controversial speech by founder Jack Ma attacking financial regulators as well as a series of recent declarations from the authorities about reining in the country's powerful internet platforms. 

The Christmas Eve announcement by China's State Administration of Market Regulation that it would investigate Alibaba Group Holding for monopolistic tactics wiped over $100 billion from the company's 

In China, Behave or Face a Campaign 

Bloomberg, January 7, 2021

Staffing and new laws aren’t yet up to speed with the country’s business growth. To cope, antitrust regulators turn to time-honored Communist party strategies for keeping things in line. With the debacle of Ant Group Co.’s initial public offering, we’ve witnessed a flurry of legislative and enforcement activities aimed at tightening antitrust regulation within the Chinese tech sector. This massive campaign, however, is hardly a new phenomenon in Chinese law.  The roots of campaign-style law enforcement can be traced back to the revolutionary period of the Chinese Communist Party, which often needed to rely on mass movements in the absence of state institutions. 

The US Commerce Department recently announced a measure that will ban Chinese telecoms giant

Huawei and its suppliers from using US-made machinery and software to design or produce chips without obtaining a US licence. Many in China perceive this move as aimed at strangling Huawei to maintain American technological hegemony.

A flurry of complaints have been filed against China in US federal courts seeking enormous damages

caused by China’s mishandling of the coronavirus outbreak. These include class actions filed on behalf of individuals and businesses from at least five different states, as well as a lawsuit by the state attorney general from Missouri, while Mississippi has also said it will file a case.

The China Inc. Illusion 

NIKKEI ASIA, November 24, 2016

Investments by Chinese state-owned enterprises in Europe have run into muddy waters recently. 

Don't Panic, China is not Buying the World 

NIKKEI ASIA, January 29, 2015

China ended 2014 as a net capital exporter, according to government data. Though a first, this should come as no surprise. 

Who is Guarding China's Trust Busters

NIKKEI ASIA, August 26, 2014

The National Development and Reform Commission, China's forceful economic planner and industrial regulator, has recently grabbed headlines at home and abroad as an aggressive antitrust enforcer. 

Contact Angela 

Email: angelaz@hku.hk