Xi Jinping's reforms: Ant Group's listing on the stock exchange suspended

Tycoon giant Jack Ma fails to abide by the government's new rules on online microcredit services. Thus the largest initial public offering in history ($ 39.7 billion) has been frozen. Operators' fears and problems for small and medium-sized enterprises. The new five-year plan contains market openings, but the regime's orientation is towards greater state control.

Beijing (AsiaNews) - The suspension of the Ant Group's listing, the largest in history, on the stock exchange has revealed the contradictions in China's economic plans, increasingly less oriented towards the free market.

On November 3, the Hong Kong and Shanghai exchanges froze the initial public offering of the Chinese company, leader in online payment and microcredit services. The reason: The Ant Group's business does not comply with the new government regulations on the granting of micro-financing through web platforms. The legislation was announced on November 2 to preserve the country's financial security and "protect the personal data of individuals" and businesses that turn to online financial institutions.

For traders, the government intervention - which blocks a listing of at least $ 39.7 billion - threatens to undermine the confidence of domestic and foreign investors in the Chinese financial system.

Jack Ma, owner of online commerce giant Alibaba, and majority shareholder in the Ant Group, stressed the social function of micro-credit web services. He points out that this is the only real tool available to small and medium-sized enterprises to access credit, given that most banks only grant loans to large groups.

This latest move by the Chinese government, especially after the initial phase of the coronavirus pandemic, signals greater state intervention in the country's economy. This contrasts with the goals s set out in the guidelines of the 14th Five-Year Plan (2021-2025), and those of a medium-term strategy renamed "Vision 2035", approved on October 29 at the end of the 5th Plenum of the Chinese Communist Party Central Committee (CCP).

The Central Committee declares it will focus on the reform of production factors - including those in the technological field - from a market perspective in order to transform China into a high-income society, and double GDP per capita within the next 15 years. By suspending the Ant Group listing they appear to go in the opposite direction.

The new tendency for greater state intervention was confirmed on November 3 by the Central Commission for General Reforms, led by President Xi Jinping. It approved a plan to make state-owned enterprises "stronger, better and bigger".

Chinese public companies are often accused of inefficiency and stifling the growth of a real private market in China: however, they are more "reliable" for those in leadership, and would have shown this during the coronavirus crisis.

Thus, it is no coincidence that immediately after the conclusion of the 5th Plenum, Jiang Jinquan, director of the Party Research Office, declared that the first objective of the new five-year plan is to increase the concentration of power in the hands of the CCP (and therefore of Secretary General Xi Jinping).