By concluding, in quick succession, the largest trade agreement in the world in mid-November, with fourteen others from its neighboring countries Asia-Pacific, then a investment agreement with the twenty-six members of the European Union, end of December, China is seen as a key economic player on the international scene.
Difficult to resist, when the country dangles better access to its gigantic domestic market. In exchange, Beijing intends to export its industrial overcapacity, but also its technologies. New Zealand, Switzerland, Australia and South Korea have signed agreements. And, in 2021, China hopes to succeed in convincing Japan.
Serving the interests of the Party first
If the authorities want to impose themselves as champions of free trade, at the national level, Beijing does not hesitate to cut the wings of its private companies when they become too powerful or encroach on its prerogatives. It’s the mishap that just happened to “Ant”, jewel of Chinese fintech which has come too close to the interests of state banks. At the last minute, Ant was deprived of an IPO which announced itself as historic.
To comply with new regulatory requirements, Ant will need to inject several billion dollars more into its capital. Financial authorities have also urged the firm to return to its initial activities: those of a “simple” online payment platform. The bill is therefore steep for its founder Jack Ma, father of Chinese e-commerce giant Alibaba, who hasn’t made a public appearance for more than two months.
The king of e-commerce is not the first to have to comply with the demands of the government. Since President Xi Jinping came to power in 2013, the regime has made banking and financial risk hunting an obsession. Several private empires have already been put under government surveillance, or even put under state supervision.
This is the case of the real estate developer Wanda, the insurer Anbang, the Fosun conglomerate or the HNA group… All had committed the same fault: having invested too much outside China and contracted abysmal debts. The message is clear: private enterprises can prosper as long as they serve the interests of the Party and do not threaten its political stability. And it will be so as long as the current President is in power.
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