Would the sun be rising in the morning if we didn’t talk about China’s crackdown on tech companies? Well, to avoid taking any risks, let’s cover China’s plans to break up Ant Group’s Alipay. If you’ve been reading our newsletter, you probably know by now that China is on an ultimate quest to fight tech monopolies and regulate data security protection.
Jack Ma’s Alipay will be forced to create a separate independent app for its loans business. This new app will be controlled by a new credit scoring joint venture with the Chinese government, which will be able to access all of Alipay’s user data regarding loans. After the news came out, Ant Group’s e-commerce affiliate Alibaba lost more than 4% on the Hong Kong Exchange.
This is not the first time that Chinese regulators have targeted Jack Ma’s empire. Last May, Alibaba had to pay $2.8b to settle an investigation into anti-competitive practices, while back in 2020, Ant Group was forced to step down from a $34.5b IPO.
why it matters
Though this news was all about Alipay, other tech companies suffered as well, with Tencent dropping 2.45% and Meituan falling 4.47%. The tech-heavy index Hang Seng lost more than 2%.