Beijing wants to break up Alipay, the superapp owned by Jack Ma’s Ant Group which has more than 1bn users, and create a separate app for the company’s highly profitable loans business, as it intensifies a crackdown on China’s big tech groups.
Chinese regulators have already ordered Ant to separate from its main business the company’s two lending units — Huabei, which is similar to a traditional credit card, and Jiebei, which makes small unsecured loans — into a new entity and bring in outside shareholders. Officials now want these lending businesses to have their own independent app as well.
The plan would also require Ant to turn over the user data that underpins its lending decisions to a new and separate credit scoring joint-venture that would be partly state-owned, according to two people briefed on the process.
As China’s regulatory crackdown continues apace, analysts said China’s big tech companies were likely to accelerate their efforts to be compliant. One such move happened yesterday when Tencent and Alibaba promised to open up their digital empires and comply with Beijing’s orders to give access to “walled gardens”, a move that may reshape online life for hundreds of millions of users.
Go deeper: Active investors’ interest in the Chinese tech trade fades as Tencent and Alibaba fall out of fashion.
What do you think of China’s crackdown on tech companies? Is it affecting your industry? Email me emily.goldberg@ft.com and let me know your views. Thanks for reading. — Emily
Five more stories in the news
1. Blinken defends US military’s chaotic Afghanistan withdrawal Antony Blinken, the US secretary of state, gave an unapologetic defence of the American military’s chaotic and bloody withdrawal from Afghanistan as he appeared before lawmakers on Capitol Hill.
2. Libor replacement reaches Wall Street’s leveraged loan market Bank of America has started marketing the first leveraged loan tied to the interest rate that is set to replace Libor, in a milestone for the industry as it transitions away from the disgraced lending benchmark.
3. Media companies linked to Guo Wengui settle SEC case Three media companies linked to Guo Wengui, a Chinese businessman and prominent critic of the Chinese Communist party living in exile in the US, will pay $539m to US regulators to resolve allegations that they issued illegal securities to more than 5,000 investors.
4. Soho China shares plunge 40% after Blackstone deal collapses Shares in Soho China fell as much as 40 per cent yesterday after US private equity group Blackstone pulled its $3bn takeover of the Chinese property company last week. About $830m was wiped from Soho China’s market value as its Hong Kong-listed shares tumbled when the exchange opened for trading Monday.
5. Ireland fails to enforce EU law against Big Tech Ireland is failing to apply the EU’s privacy laws to US Big Tech companies, according to privacy campaigners. Google, Facebook, Apple, Microsoft and Twitter all have their European headquarters in Dublin, making Ireland’s Data Protection Commissioner the lead EU regulator responsible for holding them to account on privacy issues.
Coronavirus digest
Chinese authorities have reimposed restrictions in the country’s south-east to battle an imported outbreak of the highly infectious Delta variant of the virus.
Two top US scientists who recently announced their retirements from the US drugs watchdog have criticised US Covid-19 booster vaccination policy, just days before the Biden administration rolls out its plans.
The UK has cancelled a €1.4bn vaccine deal with France’s Valneva, saying the company was in breach of its obligations under the deal.
Covid-19 jabs will be offered to all children in the UK aged between 12 and 15 as early as next week.
The day ahead
Apple launch event Apple plans to roll out the iPhone 13 today, yet all the talk ahead of that has been about smart glasses and cars. Read more on what’s coming up for the Silicon Valley giant in this edition of #techFT. Sign up for the newsletter here.
United Nations General Assembly Despite Covid-19 risks, at least 83 world leaders are expected to attend the 76th session of UNGA, which convenes in New York today. Expected speakers from the Asia-Pacific region include Indian prime minister Narendra Modi, Australian prime minister Scott Morrison and Japanese prime minister Yoshihide Suga. (NYT, Tribune India)
California recall election deadline Governor Gavin Newsom’s chances of remaining in office have improved ahead of today’s recall election, with a surge of Democrats casting early ballots and polls showing most voters opposing the effort to remove him from office.
Join leading innovators and policymakers for #TechFT Live discussions on policy, strategy and innovation for the future of tech on September 30-October 1. Free for all #TechFT subscribers.
What else we’re reading
The Xi personality cult is a danger to China The state-led veneration of Xi Jinping has echoes of the personality cult around Mao Zedong — and with it, of the famines and terror unleashed by Mao during the Great Leap Forward and the Cultural Revolution, writes Gideon Rachman.
How Germany’s Greens embraced business In the popular imagination, the Greens may spark memories of rabble-rousing protesters outside nuclear plants, or sweater-knitting hippies. But a three-year reckoning process means the eco-party and German business are both cautiously eyeing the possibility of moving from adversaries to allies.
The US needs to make homes more affordable — and available A decade on from the subprime meltdown, housing is still at the centre of the US’s economic bifurcation, writes Rana Foroohar. Just as investors drove the pre-financial crisis housing boom, they have also driven the post-pandemic increase in home prices.
Return to work: the new lessons for managers As employees begin their return to work some trends are emerging as to how companies cope with the shift. These include new styles of working, even in companies where workplace attendance is seen as essential. What are your thoughts on going back to work? Tell us in our back-to-work survey, which is part of a reporting project.
FT Masters in Management The University of St Gallen in Switzerland has retained top spot in the Financial Times 2021 ranking of masters in management degrees for the 11th year in a row. View the full ranking here.
Cycling
At first glance, it seems improbable that Tokyo, a city of 14m people that is threaded with multi-lane highways and has few separate bicycle lanes, would be an enjoyable place to cycle around. But, as with many things in Japan, it becomes more appealing the closer you look, writes John Gapper, who shared three of his favourite routes.
Source: Economy - ft.com
