Wikipedia

User:MainlyTwelve/2021 CCP financial reform

< User:MainlyTwelve
EVERY SENTENCE SHOULD HAVE A SOURCE OTHER THAN LEDE/LEAD

In late 2020,[1] the Chinese Communist Party and various Chinese regulatory bodies, under General Secretary Xi Jinping, began a regulatory spree, strengthening regulations, issuing fines, [instituting a number of reforms,] and introducing or modifying laws. Though mostly targeted at disrupting the growth of monopolistic technology companies, the government also introduced other reforms with implications for large swathes of the economy. Actions taken include the implementation of restrictions on for-profit tutoring and education companies, the refinement of existing rules for limits on minors playing online video games, and the introduction of new antitrust rules.

The stated goals of these reforms have been [among other things: "common prosperity"]. The institution of these reforms has led to turbulence in domestic and foreign capital markets and have garnered both criticism and praise from commentators in China and elsewhere.

Background and origins edit

Political climate/broader history edit

China's government is nominally communist, but reforms under Chinese leader Deng Xiaoping in the 1980s relaxed government control of some industries, allowing for the emergence of private industry.[2] China maintains state-controlled companies, such as China Mobile,[3] and the economy operates with a high degree of state control compared to those of many western nations.

  • aging of the country, decline in birth rate
  • gotta add a "recent events" section to supplement the historical context section

Recent events edit

Relations between China and the United States became strained during the Trump administration and have remained strained during the Biden administration over issues such as the sovereignty of Taiwan and Hong Kong, . An ongoing trade war between the two countries has negatively impacted the economies of both countries.[4][5][6]

Reasoning and timing edit

As stated by Chinese officials edit

Speculation from media edit

Chinese leadership has said the reforms aim to increase "common prosperity" in the hopes of shrinking the country's income and wealth disparities.[7] Additionally, regulators in the country have become wary of the power possessed by internet companies and. for self reliance.[8]

For the social good.[9] Less need to rely on foreign capital and less need to cater to how actions look overseas.[10]

Various reasons have been put forward to explain the timing of the regulatory spree. The 20th National Congress of the Chinese Communist Party will occur in 2022. During the Congress, members will be appointed to the country's Central Committee. This timing has led to speculation that Xi is committing a [power grab] or at least [shoring up power]. Xi [eliminated term limits] etc etc.

Divergence from recent precedent edit

The change to preventing IPOs and foreign listings represents a departure from the policies of the past, which [almost encouraged such IPOs].[11] Xi has spoken about more closely orienting the tech sector [rephrase] to conform with state goals and expectations in 2016 and 2018.[11]

  • begins here: 2015–2016 Chinese stock market turbulence...to avoid something like this downturn happening again?
  • trade war and tensions with US[12]
  • more powerful position because of COVID and demand for manufacturing
  • corruption crackdowns
  • 20th party congress next year

Beginning of recent activity edit

Suspension of Ant Group IPO edit

[redo a bit with more context] Ant Group, a Chinese technology-enabled financial company majority-owned by its founder,[13] Jack Ma, and affiliated with Ma's other major holding, Alibaba, began taking steps toward an initial public offering in 2020.[14] Ant Group operates a number of lines of business, including Alipay,[15] an online payments platform, Zhima Credit, a credit scoring program, and Yu'e Bao, a money market fund. Ant Group intended to raise $34 billion through the IPO process.[16] This would have been the largest such offering by any company to date, above the $29.4 billion raised by Saudi Aramco as a result of its 2019 offering.[16]

Due to Ant Group's scale—the company has approximately one billion users in China—and its operations, which include lending services, the company has attracted regulatory scrutiny in the past.[17] The China Securities Regulatory Commission previously imposed new restrictions on money-market funds, a move attributed to the size and growth of Yu'e Bao, an Ant offering.[18] Though the company asserts it does not function as a bank or a financial institution,[17] Chinese banks have voiced their belief that Ant draws deposits away from them, so undermining the banking system.[17] The People’s Bank of China requested data from banks that lent through Ant in mid-2020 and the State Administration for Market Regulation informally began an investigation earlier in the year into whether Alipay and WeChat Pay, a Tencent subsidiary, had abused their size to hamper competitors.[19]

Several days before the IPO was to take place, the company's founder and controlling shareholder, Ma, made negative statements about Chinese regulators and the governing political party, the Chinese Communist Party.[20] Ma criticized regulators for their focus on risk mitigation.[21] Soon after the comments were made, Ma and other senior Ant executives were summoned to a meeting with the China Securities Regulatory Commission, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange as well as representatives from the country's central bank, the People’s Bank of China.[22] Ant Group issued a statement disclosing that the Ant and government representatives discussed "Views regarding the health and stability of the financial sector".[23]

After the meeting, and two days before the IPO was set to occur, the offering was suspended by the Shanghai Stock Exchange; the Shanghai Stock Exchange referenced "major issues" as the reasoning behind the suspension.[24] The exchange further indicated that the company no longer conformed with listing requirements.[25] Ant subsequently suspended the Hong Kong listing.[25] The Wall Street Journal attributed the suspension to the personal will of Xi, who had become infuriated by Ma's comments, citing "Chinese officials with knowledge of the matter".[20] The suspension was unexpected, and has been referred to as "abrupt"[26], [and more]. Ant began working to address regulator concerns in January 2021,[27] though as of September 2021 no public plans for an IPO by the company had been announced.

Jack Ma retreated from the public eye after the IPO's suspension [source]. He did not appear in public between October 2020 and January 2021, when he appeared in a live-streamed video.[28] In the video, he discussed his commitment to philanthropy and improving quality of life for those in rural China.[28]

"Disorderly Capital" and articulation of anti-monopoly stance edit

Soon after the suspension of Ant's IPO, Chinese regulators introduced drafts of new anti-monopoly guidelines directed at large technology firms.[26] These rules were formalized as guidelines for companies in February 2021 by the State Administration for Market Regulation.[29] These newly instituted rules include banning online retailers from presenting different prices to different consumers based on data collected about them[30] [and other such rulings and rules]. [Companies promise to follow these in April 2021].[31]

In December 2020, the Politburo of the Chinese Communist Party emphasized that it would stand against monopolies after a meeting to discuss its 2021 economic plans and outlook.[32]

  • "disorderly capital" article info goes here!

"Acceleration" of reform edit

In March 2021, Xi called for the "acceleration" of the introduction of laws for "platform" companies.[33] Between November 2020 and the end of July 2021, Chinese regulators [did more than 50 things].[34]

  • acceleration from xi directly as reported by cnbc
  • Xi delivered a speech to the Politburo concerning China's economic outlook and policy in 2021. [untrue?]
  • Comments on capital...

Data held by technology companies edit

housing edit

=crypto edit

  • Add American reaction -- calls for increases and decreases

Action against specific companies edit

Didi edit

Didi, a [prominent ride-hailing] company, has faced scrutiny from Chinese authorities since March 2021.[35] Unlike Ant, Didi filed for its IPO in the United States.

Other reforms edit

Three child policy edit

Main article: Three-child policy

China modified its longstanding one child policy in 2016 and allowed couples to have two children.[36] The policy was updated again in 2021, allowing couples to have three children. This modification to policy was announced on 31 May 2021 at a meeting of the Politburo of the Chinese Communist Party].[37][38] The policy went into effect in August 2021.[39]

Contemporaneous events edit

Evergrande liquidity crisis edit

Main article: Evergrande liquidity crisis

Huarong edit

Energy crisis edit

Future plans edit

The State Council of the People's Republic of China and the Central Committee of the Chinese Communist Party together released a five-year plan outlining plans for regulations and updated laws in August 2021.[40] The plan calls for the continued introduction of rules and reform governing portions of the economy including the technology sector, finance, and defense.[41]

China has no tax on inheritances, [someday].[42]

Impacts edit

  • "turbulence" 1.5tn decline (per Bberg)

Commentary edit

Domestic/positive edit

Li Guangman published an article in late 2021 praising the reforms as a "profound revolution".[43]

  • sections: negative, positive, domestic, foreign, official (regulators elsewhere?), unofficial (in the press, business world)
  • didi
  • education for profit
  • gaming

References edit

  1. ^ "Chinese media defends wave of industry regulation, says reforms in West 'stuck in silence'". Reuters. 2 September 2021. Retrieved 13 September 2021.
  2. ^ Hancock, Tom; Orlik, Tom (1 August 2021). "Xi Jinping's Capitalist Smackdown Sparks a $1 Trillion Reckoning". Bloomberg.com. Retrieved 15 September 2021.
  3. ^ "China Mobile Considers A-Share Listing After U.S. Removal". Bloomberg.com. 16 March 2021. Retrieved 15 September 2021.
  4. ^ "Who's Winning the Trade War? Here's a Look at the Scoreboard". Bloomberg. May 23, 2019.
  5. ^ Nee Lee, Yen (January 1, 2020). "These 6 charts compare the US and China economies in the second year of their trade war". CNBC.
  6. ^ Laker, Benjamin (February 3, 2020). "Who's Winning The Trade War? And How Will It End?". Fortune.
  7. ^ Tang, Frank (12 September 2021). "Common prosperity and dual circulation? China's economic buzzwords unpacked". South China Morning Post. Retrieved 15 September 2021.
  8. ^ "Bloomberg New Economy: Self-Reliance Is China's Endgame". Bloomberg.com. 31 October 2020. Retrieved 16 September 2021.
  9. ^ Ni, Vincent (10 September 2021). "China's cultural crackdown: few areas untouched as Xi reshapes society". the Guardian. Retrieved 15 September 2021.
  10. ^ Zhong, Raymond (6 November 2020). "In Halting Ant's I.P.O., China Sends a Warning to Business". The New York Times. Retrieved 15 September 2021.
  11. ^ a b Conrad, Jennifer (29 July 2021). "China Cracks Down On Its Tech Giants. Sound Familiar?". Wired.
  12. ^ Webb, Jing Yang, Keith Zhai and Quentin (5 August 2021). "China's Corporate Crackdown Is Just Getting Started. Signs Point to More Tumult Ahead". Wall Street Journal. Retrieved 14 September 2021.{{cite news}}: CS1 maint: multiple names: authors list (link)
  13. ^ Caiping, Liu; Wei, Han (8 September 2020). "Jack Ma Is Controlling Shareholder, not Alibaba, Ant Says in Filing - Caixin Global". Caixin Global. Retrieved 14 September 2021.
  14. ^ Ng, Stella Yifan Xie and Serena (20 July 2020). "Jack Ma's Ant Group Plans Dual IPOs in Shanghai, Hong Kong, Bypassing New York". Wall Street Journal. Retrieved 14 September 2021.
  15. ^ Huang, Eustance (13 September 2021). "China will reportedly break up Ant Group's Alipay and force creation of new loans app". CNBC. Retrieved 14 September 2021.
  16. ^ a b Zhong, Raymond (26 October 2020). "Ant Group Set to Raise $34 Billion in World's Biggest I.P.O." The New York Times. Retrieved 13 September 2021.
  17. ^ a b c Xie, Stella Yifan (29 July 2018). "Jack Ma's Giant Financial Startup Is Shaking the Chinese Banking System". Wall Street Journal. Retrieved 14 September 2021.
  18. ^ Xie, Yifan; Yap, Chuin-Wei (14 September 2017). "Meet the Earth's Largest Money-Market Fund". Wall Street Journal. Retrieved 14 September 2021.
  19. ^ Xie, Stella Yifan (27 August 2020). "Jack Ma's Ant Remains in Regulators' Crosshairs Ahead of Giant IPO". Wall Street Journal. Retrieved 14 September 2021.
  20. ^ a b Wei, Jing Yang and Lingling (12 November 2020). "China's President Xi Jinping Personally Scuttled Jack Ma's Ant IPO". Wall Street Journal. Retrieved 13 September 2021.
  21. ^ Yuan, Li (24 December 2020). "Why China Turned Against Jack Ma". The New York Times. Retrieved 15 September 2021.
  22. ^ Yang, Jing (2 November 2020). "Chinese Regulators Summon Ant Leaders Ahead of Gigantic IPO". Wall Street Journal.
  23. ^ Elegant, Naomi Xu. "Why Chinese regulators summoned Jack Ma just before his unicorn's record-breaking IPO". Fortune. Retrieved 15 September 2021.
  24. ^ Feng, Emily (3 November 2020). "Regulators Squash Giant Ant Group IPO". NPR.org. Retrieved 13 September 2021.
  25. ^ a b Zhong, Raymond; Li, Cao (3 November 2020). "China Halts Ant Group's Blockbuster I.P.O." The New York Times. Retrieved 15 September 2021.
  26. ^ a b Lin, Liza (10 November 2020). "China Targets Alibaba, Other Homegrown Tech Giants With Antimonopoly Rules". Wall Street Journal. Retrieved 14 September 2021.
  27. ^ Yu, Xie (15 January 2021). "Ant Group Is Moving Quickly to Comply With Regulations, China's Central Bank Says". Wall Street Journal. Retrieved 14 September 2021.
  28. ^ a b May, Tiffany (20 January 2021). "Jack Ma appears in public for the first time since challenging Beijing". The New York Times. Retrieved 15 September 2021.
  29. ^ Staff, Reuters (8 February 2021). "China issues new anti-monopoly rules targeting its tech giants". Reuters. Retrieved 14 September 2021. {{cite news}}: |first1= has generic name (help)
  30. ^ Sheng, Wei (8 February 2021). "China formalizes antitrust rules targeting tech giants · TechNode". TechNode. Retrieved 14 September 2021.
  31. ^ Yang, Stephanie (14 April 2021). "China's Tech Giants Vow, in Unison, to Play by Regulator's Rules". Wall Street Journal. Retrieved 14 September 2021.
  32. ^ "China's Politburo Vows to Strengthen Anti-Monopoly Efforts". Bloomberg.com. 11 December 2020. Retrieved 13 September 2021.
  33. ^ Kharpal, Arjun (16 March 2021). "China's Xi Jinping says regulations need to close 'loopholes' as Beijing cracks down on tech". CNBC. Retrieved 14 September 2021.
  34. ^ Webb, Jing Yang, Keith Zhai and Quentin (5 August 2021). "China's Corporate Crackdown Is Just Getting Started. Signs Point to More Tumult Ahead". Wall Street Journal. Retrieved 14 September 2021.{{cite news}}: CS1 maint: multiple names: authors list (link)
  35. ^ Zhong, Raymond (5 July 2021). "China's Crackdown on Didi Is a Reminder That Beijing Is in Charge". The New York Times. Retrieved 14 September 2021.
  36. ^ McDonell, Stephen (31 May 2021). "China allows three children in major policy shift". BBC News. Retrieved 15 September 2021.
  37. ^ "China introduces three-child policy in response to ageing population". www.abc.net.au. 2021-05-31. Retrieved 2021-05-31.
  38. ^ Wee, Sui-Lee (2021-05-31). "China Says It Will Allow Couples to Have 3 Children, Up From 2". The New York Times. ISSN 0362-4331. Retrieved 2021-05-31.
  39. ^ "China NPC: Three-child policy formally passed into law". BBC News. 20 August 2021. Retrieved 15 September 2021.
  40. ^ Bloomberg News (11 August 2021). "China Signals More Regulation for Businesses in Coming Years". Bloomberg.com. Retrieved 14 September 2021.
  41. ^ Hoskins, Peter (12 August 2021). "China says crackdown on business to go on for years". BBC News. Retrieved 14 September 2021.
  42. ^ Bloomberg News (18 August 2021). "China Eyes Wealth Redistribution in Push for 'Common Prosperity'". Bloomberg.com. Retrieved 14 September 2021.
  43. ^ Buckley, Chris (9 September 2021). "Incendiary Essay Ignites Guessing Over Xi's Plans for China". The New York Times. Retrieved 15 September 2021.

brouillon edit

  • evergrande?
  • huarong ("shadow" (not sure how it's a shadow bank in a way analogous to American equivalents, but w/e) bank that was given bad debts by other Chinese lenders
  • for lead: economic AND cultural spree:
  • their words not mine: "sissy" ban etc.

User:MainlyTwelve/2021 CCP financial reform/main

Bibliography edit

  • mostly for storing sources I don't have immediate use for

articles that posit an overall explanation edit

  • 09/21
  • the thing I've been waiting for
  • 08/21
  • also the thing I've been waiting for (China’s nanny state: why Xi is cracking down on gaming and private tutors | Financial Times)
  • 02/21
  • ehhhhh not great--an explainer--but worth putting down to review later

other edit

  • MM/YY: 09/2021
  • Description: Interview with DBS head; somewhat positive
  • MM/YY: 11/20
  • Description: master list of bloomberg articles about ant ipo suspension
  • MM/YY: 09/18
  • Description: chinese slowdown explained a bit
  • MM/YY: 08/21
  • Description: Updating but inadequate timeline of "stock market turbulence"
  • MM/YY: 09/21
  • Description: antimonopoly necessary for growth
  • MM/YY: [dynamic]
  • Description: supchina?? no idea if reputable but decent timeline/guide
  • MM/YY: 09/21
  • Description: hill opinion re: will us do similar things
  • MM/YY: 08/21
  • Description: tax reforms for individuals; article highlights things that will probably impact individuals more than large orgs.
  • MM/YY: 09/21
  • Description: Here's What to Know About China's Sweeping Tech Crackdown—and Why It Could Make U.S. Big Tech Regulation More Likely
  • MM/YY: 09/21
  • Description: tutoring companies doing a dang pivot
  • URL: [FROM WAPO: The Technology 202: China is doing what the U.S. can’t seem to: regulate its tech giants]
  • MM/YY: 07/21
  • Description: FIND THIS BUT FROM ANOTHER SOURCE, NO WAPO
  • MM/YY: 08/21
  • Description: re: wapo this kind of works?
  • MM/YY: 08/21
  • Description: regs other than economic
  • MM/YY: 07/21
  • Description: was linked to by another WSJ article with hyperlink "risk angering foreign investors" or something similar
  • MM/YY: 08/21
  • Description: this article linked to the one described above. probably best one I've found so far re: speculating to origins of the spree
  • MM/YY: 2018
  • Description: didn't really read it (plus it's from 2018) but might explain origins a bit? who knows....does remind me that law reviews might be useful
  • MM/YY: 01/21
  • Description: fear-mongering atlantic piece (wot if billionaires were targeted by reform)
  • MM/YY: 01/21
  • Description: 01/21 banner month for the atlantic manufacturing consent for china-as-enemy: "undoing of china's economic miracle"
  • MM/YY: 07/21
  • Description: do they lol? not a ban of the classes, bad framing
  • MM/YY: 04/21
  • Description: for ant section decent timeline and the real justification given for suspension, Xi involvement or not however is an opinion piece, "guest essay"
  • MM/YY: 08/21
  • Description: Dalio commentary pushback
  • MM/YY: 08/21
  • Description: China’s Regulatory Crackdown Is Already Hurting the Economy
  • MM/YY: 07/21
  • Description: China Cracks Down On Its Tech Giants. Sound Familiar?
  • MM/YY: 08/21
  • Description: China Commentary Calls Xi’s Crackdown a ‘Profound Revolution’
  • MM/YY: 09/21
  • Description: anti-quant moves, commitment to allowing private industry; foreign money access to china, chinese markets
  • MM/YY: 08/21
  • Description: China’s Celebrity Culture Is Raucous. The Authorities Want to Change That.
  • MM/YY: 09/21
  • Description: just making sure I have this one saved
  • MM/YY:
  • Description: probably useless but keeping it in case
  • MM/YY: 09/21
  • Description: China’s cultural crackdown: few areas untouched as Xi reshapes society
  • MM/YY: 09/21
  • Description: fear-mongering piece about "leap backward"
  • MM/YY: 09/21
  • Description: debate, including "not second rev"
  • MM/YY: 11/20
  • Description: china "crackdown" explainer of sorts
  • MM/YY:
  • Description: probably best for precedent so far
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  • Description: source for "state control" context
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  • Description: description of state control
  • MM/YY: 09/21
  • Description: uhh gets into the fact that comparisons to cultural revolution are spurious
  • MM/YY: 09/21
  • Description: parents like video game ban
  • MM/YY: 09/21
  • Description: Evergrande + regulation + consequences / impact
  • MM/YY: 09/21
  • Description: failed blackstone deal
  • MM/YY: 09/21
  • Description: China and Big Tech: Xi’s blueprint for a digital dictatorship
  • MM/YY: 08/21
  • Description: China’s top court takes aim at ‘996’ overtime culture in blow to tech groups
  • MM/YY: 09/21
  • Description: china reassures ws banks, american financial companies
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three red lines and evergrande edit

  • MM/YY: 04/21
  • Description: Evergrande Fails ‘Three Red Lines’ Test as Peers Improve
  • MM/YY: 10/21
  • Description: China’s Property Fantasia Turns Nightmarish
  • MM/YY: 04/21
  • Description: Next China: When Red Lines Move [written by "bloomberg news" no particular author]
  • MM/YY: 09/21
  • Description:Evergrande Debt Crisis Is Financial Stress Test No One Wanted Emma Dong, Amanda Wang, Tom Hancock, and Jun Luo
  • MM/YY: 09/20
  • Description: OPINION but seems good............."China Can't Afford to Let Property Crash"
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celebrity culture edit

  • MM/YY: 09/21
  • Description: celeb culture and fan culture

macau edit

  • MM/YY: 09/21
  • Description: macau gambling
  • MM/YY: 09/21
  • Description: also about macau
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huarong edit

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have to close some tabs or computer will cease functioning edit

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closing a bunch of ipo and pre-ipo tabs edit

  • MM/YY: 08/20
  • Description: As IPO Looms, All You Need to Know About Jack Ma’s Ant Group
  • MM/YY: 08/20
  • Description: wsj ipo looms
  • MM/YY: 07/20
  • Description: no nyc for ant
  • MM/YY:
  • Description: Jack Ma used this one already ’s Ant Remains in Regulators’ Crosshairs Ahead of Giant IPO
  • MM/YY: 2018
  • Description: crosshairs
  • MM/YY: 09/17
  • Description: big freakin' mmf
  1. ^ Hancock, Tom; Orlik, Tom (1 August 2021). "Xi Jinping's Capitalist Smackdown Sparks a $1 Trillion Reckoning". Bloomberg.com. Retrieved 15 September 2021.
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