China’s delay of the Ant Group’s projected $37 billion IPO is an interesting study in internal domestic regulation, within a financial environment where international players are trying to one-up each other.
Yahoo Finance reports the Chinese government has delayed the Ant Group listing, citing concerns around debt and risk mitigation, in actions that Alibaba leader Jack Ma called “outdated regulation.”
“The decision was made in accordance with laws and regulations… and about maintaining stable, healthy market development in the long term,” said Liu Guoqiang, deputy governor of the People’s Bank of China (PBOC), according to Reuters news.
As for U.S. efforts to blacklist the Ant Group, which we reported in mid-October, those appear to have vanished.
Reuters reports Nov. 3 show the U.S. Commerce Department, which initiated the proposed ban, backed off after a phone call from Ant Group top brass.
“The Commerce Department, which oversees the blacklist, shelved the proposal after Alibaba Group … President Michael Evans urged Commerce Secretary Wilbur Ross to reject the bid in a phone call, (sources) said, declining to be named because they were not authorized to speak on the matter,” wrote Humeyra Pamuk, Alexandra Alper and Karen Freifeld. Three of (the sources) said fears of antagonizing Wall Street ahead of Tuesday’s presidential elections and the possibility of a lawsuit helped convince Ross to set the plan aside.”
As Ant Group’s people prepare to reshuffle the cards to get regulatory approval, it’s important to remember that the bigger Sino-U.S. picture is still fraught with enterprise roadblocks such as the U.S. administration’s imminent urge to blacklist TikTok, owned by Chinese company ByteDance, unless it gets bought out by Walmart and Oracle.
Much of the U.S. protectionism is ostensibly about national security, as U.S. legislators and others pose the suggestion that the Chinese could spy on U.S. citizens through the platforms. However, the routine request by the NSA to install backdoors in American tech undercuts the regulatory appeal of this angle.
There’s going to be a lot more to come, so stay tuned.