China Tightens Its Grip on Fintech

In late 2020, as Jack Ma’s Ant Group Co. prepared for a $35 billion initial public offering, many outside China wondered if the country’s financial technology giants were becoming a global competitive threat to U.S. and European banks and payments companies. Ant’s Alipay app, used for everything from hailing cabs to investing, had already rewired financial services in the world’s second-largest economy. There was just one problem: Inside China, policymakers were growing uneasy about the sudden dominance of their homegrown superstars.

Ant’s IPO was suspended at the last minute on Nov. 3 after Ma was summoned to speak with regulators. The sudden focus on Ant was a surprise to a lot of investors, but since early 2017, Beijing has been on a campaign to defuse risks in China’s $53 trillion financial system. (It’s also wary of executives who get very rich, powerful, and outspoken. Ma has been all three.) Regulators have already clamped down on peer-to-peer lenders, overleveraged conglomerates, and embattled regional banks. The Ant episode was a sign that they’ve trained their sights on the fast- evolving world of fintech companies, which until recently have benefited from a light regulatory touch.