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The real damage with China

As the world awaits the final vote count for the American election, I’ve heard a few people say that they hope that Donald Trump prevails for one very simple reason. He appears to be the only President who has stood up to China. Mr. Trump, to his credit, has openly spoken with the president of the other China (Taiwan – or the China with democracy and an open market but a lot less people) and has bolstered ties with the only other Asian nation that can match China in terms of population – India.

While the American election has caught the world headlines because it determines the holder of the most powerful office in the most powerful country, the real issue for China’s leaders is closer to home. American Presidents as is well known are limited to two four-year terms. If Mr. Trump wins, it’s a case of waiting another four years. If it’s Mr. Biden, it’s a case of working around another possible eight years.

Furthermore, while Mr. Trump has started a “trade war,” with China, he has been useful to them. His divisive rhetoric in domestic American politics, allows the communist party in Beijing to paint itself as a calmer, more stable force to China’s domestic audience.

So, while the story on the US election is grabbing the headlines, the more important story is in fact domestic. It concerns the suspension of the Initial Public Offering (IPO)of Ant Financial, which is controlled by Jack Ma, China’s most prominent tycoon out of China. The official reason for suspending what would have been the world’s largest IPO from the Shanghai and Hong Kong stock exchanges was because the regulators had “concerns” about the stability of the market. This sudden suspension of the US$37 billion sent Alibaba shares tumbling along with Mr. Ma’s fortune. More details can be found at: [LINK]

The reasons for the suspension of the IPO look political. Call it a case of the Communist Party acting to remind Mr. Ma, that despite his international profile and vast wealth, who was boss. Whatever one might think of Mr. Ma, this move does not speak well of the Communist Party and China’s ambitions to replace the USA as the world power.

Mr. Ma, is in many ways, the ideal face of modern China. With a net worth of around US$53 billion, Mr. Ma is the richest person of Chinese descent, surpassing the former title holder, Hong Kong’s Li Ka Shing by some US$20 odd billion. Mr. Ma’s life story reads like a Silicon Valley entrepreneur rather than a traditional Chinese businessman, both in Mainland China and in the Chinese diaspora in Southeast Asia. Unlike the tycoons in capitalist Hong Kong, he’s more than a high-end property trader and unlike the tycoons in Southeast Asia, he didn’t make his fortune in commodities through an alliance with the local officials. Mr. Ma is from relatively humble beginnings, taught himself English and used new technologies to make life better for the Chinese consumer.

More importantly, the key difference between Mr. Ma and the average Chinese tycoon (both in China and beyond) is that he’s got an international savvy. Unlike traditional Chinese tycoons who loath publicity, particularly from the Western media, Mr. Ma revels in it. He’s actually confident when communicating in English. He’s also politically savvy. When Donald Trump was elected in 2016 on platform of bashing China for not allowing American business to compete on an equal footing, Mr. Ma went all the way to Trump Towers to offer ways in which American SME’s could use Alibaba to sell to China.

Photo: South China Morning Post.

Mr. Ma is the hero that China needs. Here is a home-grown entrepreneur, from relatively modest beginnings who built a great fortune by using innovation. What’s there not to like for a country that has global aspirations.

Unfortunately, the very things that make Mr. Ma so vital to a modern China and by extension a rising Asia, are the very things that piss off authoritarian leaders who depend on a population believing that they need authoritarian leadership to survive.

Mr. Ma is by no means a rebel. He joined the Communist Party and has never done anything to suggests that China should be governed by anyone other than the Communist Party. However, he’s known to be an open proponent of the free market system, something which may not always go down well in a communist society.

To be fair to China’s Communist Party, they have not done what Mohammad Bin Salman in Saudi Arabia did. Mr. Ma has not had to spend a day in any form of prison and been forced to sign over his property.

However, while this move might seem gentle and semi-legal on the scale of things, this is something that should not happen in a place that has aspirations of prosperity as it sends out a worrying message, particularly to the people like Mr. Ma who create wealth. The message is simple, no matter how much you create, you are still at the mercy of the government machinery.

China has risen by soaking up foreign investment. However, this latest move is a subtle reminder to the foreign investment community that the Chinese government can screw with them whenever it feels like it. Hence, foreign investment should be careful about investment in China and getting greedy at the prospect of the billion-person market.

More importantly, this message to aspiring entrepreneurs. That message is that no matter how much you create for the good of the nation, you will still be at the mercy of the communist party.

The story on Ant’s IPO should worry China’s business community far more than the results of the US Presidential election. China’s communist party can and may undo the years of prosperity of the last two decades if they believe that they need to increate their grip on power.

 

Tang Li

*Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.

 

 

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18 Responses to “The real damage with China”

  • MarBowling:

    Everything Trump touches dies. Ma shouldn’t have let Trump touches oops shake his hands!

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  • Reality and hope:

    The world is much more complex now.
    Everyone has their own agenda.
    Maybe the suspension of ANT IPO is a good thing for the investors…overvalued?
    Hope the world will be a better place for the ordinary man on the street with the latest USA President election result…with the world in a mess now.

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  • BK:

    Let us first understand or at least agree what works in economics. Liked most post WW2, countries unshackled from colonialism, wanted a country of self sufficiency; import substitution.

    It didnt work, coz the education, technology and political organization were feudal. A top down approach, a bureaucracy that wanted to tell u what to produce, what to eat, what to wear. Its pretense of omniscience led to mass starvation and total destruction of the Chinese culture and ppl.

    Deng changed track. Opened the economy. State transfer of land, capital to boost private enterprise. Geared into West capitalism. Let the Chinese innate survivor instincts project more naturally…economic progress beyond what ancient China had done. China revival? BS, China average ppl never had it better. Revive to what?

    So it is globalization, private enterprise, freedom of economic expression, a capitalist model that places emphasis on individuals.

    But since Xi arrival, the State has been encroaching into private enterprise. The funds available for private enterprise is transferred to State enterprises.

    U have to ask why? A reasonable reading is that Xi assent was supported by the military. Its emphasis is military projection , this is seen with China in trouble with South China Sea, Taiwan, India etc . Military projection internationally means u need a pliant domestic audience.

    This play with Ma shows how entrenched the current CCP is with regards to anti-business CCP cannot tolerate that its management of its economic ecosystem is being questioned. Instead of embracing ppl liked Ma as a significant stakeholder to China prosperity, they seek to marginalize him.

    I think within a decade, the Chinese biz comnunity who had prospered the hard way,who understand the managenent of ppl will make significant inroads into politics and the CCP.

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  • oxygen:

    @ BK, @ Reality and hope, @ MarBowling

    ALL BRILLIANT COMMENTS, salute!

    Jack Ma once said these words – you must LOVE the Communist Party but NEVER MARRY IT.

    ‘Be in Love With Them, but Don’t Marry Them’

    https://foreignpolicy.com/2014/10/31/be-in-love-with-them-but-dont-marry-them/

    His almost clairvoyant premonition came back to haunt him now – Ant Financial IPO surrender or else!

    BUT I AGREE WITH CCP decision to stopping Ant Financial IPO.

    Digital technology is transient wealth for most investors and benefit mostly a handful of its entrepreneurs. IT CREATES NOT ECONOMIC GOODS, how can it create durable economic wealth except for a few lucky carnival barkers and hucksters?

    The stock market has this enigma of experience INESCAPABLE of reality. Very few (outside the entrepreneurial seed capital) buy IPOs and hold it for life time investment. Most of them stacked the IPO issue for profits, that it why it is most heavily traded on listing on stock exchange. Even if it was another AMAZON, TESLA, MSFT, (or even now fallen Walmart or GC or Intel), very few make money trading the shares on its UPLEG rises BUT IN MARKET FRENZY OF BUBBLE CHASE NOW of US technology sector, MOST OF THE SO-CALLED INVESTORS AND ETF buyers ARE CHASING shadows of their own GHOSTLY FICTION OF IMAGINED WEALTH bought, maybe nearing its peak.

    ALL INVESTMENTS BUBBLES IN PEAK, just before it plunge into demise. Those who “CLEVERLY BOUGHT” into these bubbles will lose their shirt, pants, panties and something else too (actually too embarrassing to speak of here).

    The bigger the share price implosion of bubble, the more BRUTAL of wealth assassination results thereon and PRECIOUS FEW made money post IPOs in reality.

    THIS IS THE ENIGMA AND REALITY OF MOTHER NATURE OF INVESTING.

    Ant Financial IPO, if allowed, will escalate the political clout and greatly expand the wealth of Jack Ma. CCP will not allow this to happen – political stability and power base of CCP will forever live under challenge from Jack Ma and other IPO of digital wealth STARING AT THE SEAT OF BEIJING SEAT OF POWER.

    It is the worst gangrene of RICH POOR WEALTH INEQUALITY DIVIDE – mostly for the cause and gain of one great entrepreneur.

    And the peasants?

    Mostly drowned in debt leverage of living on credit through Ant Financial life-line of spend now, pay later.

    IF CHINA IS DROWNED IN DEBT OF ITS PEASANTS with near ZERO FINANCIAL LITERACY, how can THE PEOPLES BANK OF CHINA (PBOC), China’s central bank, ever going to successfully engineer its fiscal policy tool and engage its monetary policy to effect of consumer spending aggregate?

    Beijing, PBOC and Xi ChiPing will be trapped of policy IMPOTENCE – and all for the cause of Jack Ma’s (rightful) wealth aspiration, power grabs.

    The buy-now-pay-later is VERY DANGEROUS for IPO shareholders, THEY WILL END UP PAYING FOR CONSUMER’S BANKRUPTCIES.

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  • xoxo:

    Is Mr Ma the richest man of *chinese* descent both inside and out of CHINA?
    I dont know!

    Maybe the *Lees* are the richest.
    But their wealth is STATE SECRET???

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  • oxygen:

    Continuing from the preceding paragraph….

    Investors of technology FORGOT one holy grail of survival to their peril, just like Jack Ma’s prophetic prognosis – TECHNOLOGISTS , everywhere, MUST HAVE SEX with political power – be that is Beijing, London, Brussel (EU) or Washington.

    Just look at how sovereigns are eagle-hawking digital power houses. When Cambridge Analytical implosion erupted – NO ONE IN FACEBOOK (except the forced presence of Mark Zuckerberg) dared to PUBLICLY or IDENTIFIED OF WHOM HE/SHE IS or to respond to any journalist enquiries/requests for comments.

    Why?

    Because when you respond to media probe, YOU AND MARK ZUCKERBERG/Facebook ‘own” that reply and its tailing implications.

    ALL SHUT UP, except Mark Zuckerberg. Just look at how tense Mark Zuckerberg was in Congressional hearing testimony.

    DIGITAL TECHNOLOGY IS FAR MORE POLITICAL of power implications than ECONOMIC WEALTH EFFECTS/IMPACT which benefits a few and HIGHLY DISRUPTIVE to both consumers and SHIFTING OF POWER TO GOVERNMENT AND SOCIAL MEDIA BALANCING.

    Consumers gets their mails digitally, shop for their condoms online, even buy their favorite call-girl (instead of pack hunting in Geylang risking offending illegal assembly law unique in LEE-jiapore) conned into buying certain shares by promoters of listed entities on U-tube channels, even official announcements via the stock exchange (I have seen so many of these blindfolding lolly-laden lies told in stock exchange release announcements) and get their regular news information feed from TONGUE-TWISTING politicians (like Donald Trump claims of mass election frauds in states which his own Republic Party was in control before losing to Biden’s Democrats …i.e. Republicans colluding with Democrats to cheat Republican Trumps of his election win?????).

    The truth is that OUTSIDE THE TECHNOGISTS DIGITAL WORLD AND “UN-NATURAL ARISTOCRATS”, the rest of peasantry is nothing more than a rowdy mob of gullible fools not much clever than circus clowns, carnival barkers and hucksters.

    WHOEVER OWNS THE DIGITAL PLATFORM OWNS THE POLITICAL POWER.

    SMART NATION is only “SMART” of political manipulations and control of peasants, IT HAS NO ECONOMIC WEALTH VALUE of sustainable value BECAUSE THE MASSES OF PEASANTS CAN’T KEEP UP -often stuck at the beginning of the digital runway and the TECHNOLOGY PLANE OF POWER MANIPULATION have already taken off into the stratospheric clouds of auto-piloting.

    Xi Ji ping is smarter or well-advised.

    IF DIGITAL technology brings wealth to a few VERY RICH Jack Ma’s, IT IS THE END OF THE COMMUNIST PARTY OF CHINA and even with brute force of another Tien-An-Men massacres in global media headline and U-tube visualized reality, IT WILL BE DENIED of existence.

    BUT THE END FINALITY WILL BE THE SAME – PBOC is left an IMPOTENT EUNUNCH. Viagra is USELESS – its TOY is already cut off.

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  • oxygen:

    I HAVE OFT READ OF THE WORD “DISRUPTIVE” instead of the word “wealth” associated with DIGITAL TECHNOLOGY.

    In “disruptive” anathema, politics hates digital technology because TRUTHS CANNOT BE REVEALED.

    TO AVOID DOUBT, just ask the ghost of the late Dr LiWenLiang, the “whistle-blowing” doctor who was forced to sign “confession” of anti-state rumoring mongering and “fake” news dissemination before the coronasvirus in Wuhan hospital “disappeared” all his truthful tales.

    Wuhan hospital announces death of whistleblower doctor Li Wenliang

    https://edition.cnn.com/2020/02/06/asia/li-wenliang-coronavirus-whistleblower-doctor-dies-intl/index.html

    IN AH TIONG LAND, LIES, COVER-UP AND all its concoctions of evil is DOWN TO ITS ROOTS.

    In LEE-jiapore, its version is “SEXED UP” as POFMA – that is its incubation of invention is telling of truths buried in desperate needs of revelation (Hyflux told in 2011 that it has to plan for population of 8.5 million, PAPpypolitics claimed in 2020 election hustings that 6.9 million is not even a planning horizon – it is binary of one is truth telling, the other is lies peddling).

    THE FINALITY OF CONCLUSIONS OBSERVED is that Ah Tiong Land is NOT WHAT IT SEEMS to be, so is LEE-jiapore when it comes to digital truth.

    ANYONE STILL SURPRISED THAT XI JIPING dropped Jack Ma and his Ant Financial IPO from stratospheric height?

    DISRUPTIVE POLITICS OVER-RIDE ECONOMICS ( except benefiting a few only, perhaps) of otherwise NO WEALTH CREATION EFFECTS considerations.

    Anyone who would have bought Ant Financial IPO is NOT BETTING ON TECHNOLOGY or its fictitious wealth effects but IS actually BETTING IN THE Ah Tiong Land CASINO and the smiling croupier at the gaming table is Xi-Jinping who change the rules of the game any moment as he pleases.

    Nobody buys ” digital technology” shares, they all buy “political” shares – the odds worst than in casino. In the meantime, wait for the next technology innovation/improvement to wipe out your (invested) balance sheet BECAUSE SHAREHOLDERS (who have no escape route in distress than selling out at depressed levels) ALL END UP LOSERS over-paying oft for inflated valuation elevated on by hype and lots of drama acting of its promoter.

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  • SojoüRne:

    Let’s see, Alibaba investors bought many Caribbean-based holding companies with tenuous ties to the actual firm. The investors ownership interest is virtually trumped by the powers granted to a small group of insiders.

    This makes you wonder if the I.P.O. would have made the Ant Group ‘too big to fail’ in the eyes of the Chinese Communist Party. In the U.S., ‘too big to fail’ means that the Government is ultimately liable for failures of (privately owned) banks, as evidenced in the 2008 debacle.

    Sounds like the Chinese government doesn’t want its economy to fall prey to an MMM-like scandal that befell Russia’s fledgling free-market economy in the ’90s.

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  • China is Trouble Maker:

    Dear Tang Li, you said I’ve heard a few people say that they hope that Donald Trump prevails for one very simple reason. Trump appears to be the only President who has stood up to China.
    ==========================================================
    Yes, it is in SG interest to work with India and USA to bring down China aka break it.

    China is now being isolated.

    Nobody in the world would want to befriend a 13 billions population who go around with their uncultured, dirty and cheating habits, create PM2.5 cancerous haze burning on every 7th month and enslaving their people.

    Please support America Joe Biden to continue Trump’s effort to shutdown all Confucius school孔子学院 worldwide, including Singapore.
    https://www.washingtontimes.com/news/2020/aug/13/trump-administration-confucius-institute-is-arm-of/
    Only British Council or American Council and culture be allowed to spread to the world.

    Never never learn or get near Confucius teaching. It is against progress, against woman, against equality. All in all, Confucius teaching is against human right. (now where are all the pro democracy nuts aka backside poker?)

    GE2024.PAP.Guarantee.Win.Again
    $PAP$ Tua Kee; Majullah $PAP$; $PAP$ Huat$ Huat$ Huat$
    Lazy, Unmotivated, Whinning Singaporeans must be Cheaper, Better, Faster.
    Workers must accept wage sacrifices to keep businesses going.

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  • TUMASIK Patriot:

    Evil rules the WORLD and Lonely will be The Brave & Good!!!

    TRUMP Triumph over Evil, but lose to the Devil and God will Deliver The Brave & Good through Pence the VPOTUS…

    Look at SIN city??? where are the Brave & Good either dead or dying??? being replaced??? by what??? your guess is as GOOD as mine

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  • TUMASIK Patriot:

    BK:
    Let us first understand or at least agree what works in economics. Liked most post WW2, countries unshackled from colonialism, wanted a country of self sufficiency; import substitution.

    It didnt work, coz the education, technology and political organization were feudal. A top down approach, a bureaucracy that wanted to tell u what to produce, what to eat, what to wear. Its pretense of omniscience led to mass starvation and total destruction of the Chinese culture and ppl.

    Deng changed track. Opened the economy. State transfer of land, capital to boost private enterprise. Geared into West capitalism. Let the Chinese innate survivor instincts project more naturally…economic progress beyond what ancient China had done. China revival? BS, China average ppl never had it better. Revive to what?

    So it is globalization, private enterprise, freedom of economic expression, a capitalist model that places emphasis on individuals.

    But since Xi arrival, the State has been encroaching into private enterprise. The funds available for private enterprise is transferred to State enterprises.

    U have to ask why? A reasonable reading is that Xi assent was supported by the military. Its emphasis is military projection , this is seen with China in trouble with South China Sea, Taiwan, India etc . Military projection internationally means u need a pliant domestic audience.

    This play with Ma shows how entrenched the current CCP is with regards to anti-business CCP cannot tolerate that its management of its economic ecosystem is being questioned. Instead of embracing ppl liked Ma as a significant stakeholder to China prosperity, they seek to marginalize him.

    I think within a decade, the Chinese biz comnunity who had prospered the hard way,who understand the managenent of ppl will make significant inroads into politics and the CCP.

    Very Intellectual and pleasing to the “thinkers & doers” but The Creator created a world for a man to Plant Hunt and Harvest and the devil turn it upside DOWN to chase the Love of Money and Hate to achieve NOT to Love and Care

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  • Bad Boy:

    马云也“翻车”!用了这么多年花呗,现在才知道蚂蚁是如何挣钱
    https://finance.sina.cn/2020-11-06/detail-iiznctkc9925292.d.html?cre=tianyi&mod=wpage&loc=15&r=0&rfunc=1&tj=cxvideo_wpage&tr=214&wm=3236

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  • Bad Boy:

    蚂蚁翻车了,花呗还用还吗
    http://www.huogua.net/wap/a/38046

    This video is interesting.

    Some of the terms n conditions lay out in the IPO. Institution buyers need to hold for 12 months whereas public need to hold for 18 months ?

    Anyway do your own detail study , do your homework whether the above explanation sound.

    Sometime all this fintech or p2p no different from all the countless p2p scams or MLM scams thats burst in China or other parts of world.

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  • Dotard is history and the incoming one also nto good or a saint anyway, so nothing fro the world to be happy about.

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  • Covidial Posterity:

    If Covid19 is not enuf to teach this maddening world,
    then all shall wait for a much more destructive Covidial Posterity that will lead to the Doom’s Day!

    Billions and trillions of dollars will instantly vanish in thin air….Total WipeOut!

    Everyone shall bear grave torments, be it King or Pauper.

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  • TUMASIK Patriot:

    TRE Techie:
    Dotard is history and the incoming one also nto good or a saint anyway, so nothing fro the world to be happy about.

    Turn to your Creator and “TRUST” in Him and you will find TRUE HAPPINESS…NOT Preaching or Spinning but The “TRUTH”…Have a Heart unlike those who have NO HEART!!!

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  • oxygen:

    READ THIS of how China is fearful of the fintech revolution, despite its seeming embrace of technology.

    With Ant’s IPO on hold, China calls for fintech regulation

    https://www.cnbc.com/2020/11/06/with-ants-ipo-on-hold-china-emphasizes-need-for-fintech-regulation.html

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  • Soccerbetting2:

    Reported on Straits Times :Quote-”China suspends fish imports from Indian firm after coronavirus detected

    Imports will resume automatically after one week, the General Administration of Customs said in a statement.PHOTO: AFP
    PUBLISHED1 HOUR AGO
    FACEBOOKWHATSAPP
    BEIJING (REUTERS) – China’s customs office said on Friday (Nov 13) it will suspend imports from India’s Basu International for one week after detecting the novel coronavirus on three samples taken from the outer packaging of frozen cuttlefish.

    Imports will resume automatically after one week, the General Administration of Customs said in a statement….”Unquote.

    Response : Singapore better ban fish import from India company too .India corona virus very dangerous.

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