The Chinese authorities’ antitrust action against the e-commerce giant appears arbitrary, which will not bolster investor confidence in China’s thriving internet firms.
Alibaba and Ant Group founder Jack Ma has become the focus of a regulatory crackdown. Credit: Alibaba Group
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 mere announcement of the investigation into Alibaba wiped more than $100 billion off the firm’s market value overnight. Given the Chinese government’s huge regulatory power, investors are rightly anxious about Alibaba’s prospects. But the government’s sudden and aggressive move against the firm also reveals much about the regulatory regime’s weaknesses.
To be sure, the Chinese go
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Last year, a nixed deal between the Solomon Islands and Sam Group, a Chinese conglomerate, offered a rare window into how Chinese companies often work in tandem with, and sometimes on behalf of, Beijing.
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