Xi Jinping is showing all the traits of Mao, as he tries to become the 21st-century Communist authoritarian of China. And after what he did with Jack Ma and his Ant Group just recently, the Chinese companies and capitalists have become extremely fearful and want to stay miles away from going for the Initial Public Offering (IPO).
This is actually a bad sign for the Chinese economy and for the Chinese Communist Party, which wants to increase economic activity and attract investment to boost the plummeting economic indicators. However, Commander Xi Jinping pays no heed to this as he seemingly wants to take China back into the days of Mao Zedong.
Xi Jinping is quite different from his predecessors and instead of following on the path of prosperity that Deng Xiaoping set in, he has the intention of becoming the modern Mao. The final nail in Alibaba’s coffin has been struck and by fining the e-commerce company with a fine of 18.2 billion yuan (US$2.78bn), Xi Jinping has made sure that no competition to his authority arises. However, it also brings an end to the façade of China being a market and business-friendly country.
When China’s anti-trust regulator revealed on Saturday that it had slapped a fine of 18.2 billion yuan ($2.8 billion) on the Hangzhou-based tech giant, it became the country’s highest-ever antitrust fine. The fine is equal to approximately 4% of Alibaba’s domestic sales in 2019. Alibaba had exploited its market supremacy, according to China’s State Administration for Market Regulation (SAMR). The e-commerce company has been targeting merchants who use rivals’ platforms since 2015, a tactic known as “Er Xuan Yi,” which translates to “choose one out of two.” Or at least these are the claims of China’s agencies.
Read more: For Jinping, It’s not about curbing Alibaba anymore, it’s about finishing it forever
However, the hypocrisy could not be more apparent. While CCP is killing the businesses which have become the largest wealth creators, it is desperately looking for any sort of investment. China has become a sinking economic ship and companies and investors alike are attempting to move out as fast as possible. And to stop them from moving out, China has come up with the idea to have them entangled in lawsuits.
Lawsuits aimed at holding Arm Ltd.’s controversial chief executive in power are complicating SoftBank Group Corp.’s attempts to sell the company to Nvidia Corp. The fight for ownership of Arm Ltd.’s China business is intensifying, with new lawsuits aimed at keeping the unit’s controversial chief executive in power. The paper dragon wants to salvage its possibility of becoming the market leader in the chip-making industry and this is why it has made it difficult for SoftBank to move out of its domestic market.
The contrast could not be more apparent. At one end of the spectrum, CCP is taking coercive measures against its own wealth creators and axing the companies, and on the other end, it does not want companies to move out of China. It will be interesting to see for how long the hypocrisy lasts.