Ant's case: treating Ant like an financial institution. Setting standards on capital requirements, lending standards etc. Perform financial pressure tests similar to banks. Ant lends money, issues ABS, of course they are a financial institution, should subject to the same rules as anyone else. Upside: reduce financial risks, especially if there is economic downturn. If a financial crisis like the 07 crisis happens, the wealthy might be fine, but the middle class people might lose their jobs, their mortgaged house, their retirement investments into companies that are bankrupt. So preventing a financial crisis is protecting people's livelihoods. The government action shows its not afraid to halt a multi-billion dollar IPO to do this.

Alibaba: establishing Alibaba had "dominate position" in E-commerce industry based on market data between 2015 and 2019 and as such, require seller exclusivity is against anti-monopoly law. Upsides: Make this scenario as a precedent, deter future cases from happening. Reduce the dominate player's ability to bend the rules to hinder competition. Allow more choices for sellers, the majority of which are small businesses. Alibaba's seller exclusivity harmed both competition and the sellers.

Tencent: Establishing Tencent's taking majority of controlling stake in 中国音乐集团, resulted in Tencent being dominate position in online music service. It is illegal under anti-monopoly law for not reporting such transaction for review. And by anti-monopoly law, state council can order the entity to take action to reduce its market consolidation. The action ordered is Tencent cannot sign exclusive music licensing with upper stream suppliers. After Tencent's transaction, it signed exclusive music licensing with Warner, Sony and Universal. This has been devastating to competing music services, Netease cloud music, Xiami music, etc. Upside: Establish precedent. Ensure there is room for competition. Good for competitors.

The advisory on Meituan and food delivery platforms: Attempt to address some key public concerns about food delivery platforms. Food delivery workers extremely overworked by delivery platforms, low pay, lack of safety, insurance protection, and practices such as penalizing delivery workers for late deliveries while over stuff them with orders. Upside: good for delivery workers or other gig workers. Also good for companies because the government is not making drastic changes that destroy the fundamentals of their business. Instead, it is issuing a sensible plan of action that are not too costly for the companies. Also calls for them to investigate different approaches to solve delivery workers pain points.

The advisory on K12 education outside of school: This is a lot more controversial. The background is that most Chinese students spent their time outside of school, during weekends and summer break, in some kind of prep classes, it could be English, math, etc. Chinese parents sent their kids to these prep classes hoping their kids can get ahead of others. When I was growing up, as a primary schooler, my Saturday is Violin class, a English class, my Sunday was a math class and a English class. My summer weekday is all English and Math classes. I heard parents would sent their kindergarten kids to prep class teach grade 2 material. The thing is the prep classes is now a huge industry. Prep class companies market to parents and kids, telling them things like you can get ahead others, you need come to us to learn to get good grades to go to university. Parents spent huge amount of money on "out of school" classes. Another issue is, as these "out of school" classes and companies earn a lot of money, they can pay their teachers much more than public school. So good teachers are leaving public schools, resulting in decreasing quality, more kids have to take "outside" classes, creating a vicious cycle, adding to kids time burden and parents financial burden. The most dangerous thing this creates is segregation of education quality based on economic class. Parents with money can send their kids to place with best education resources, while parents without money send their kids to public school with lower education quality. The new k12 education advisory is about trying to return education to its public, universally benefiting nature, reducing the profit seeking tendency. It is also trying to reduce parents and kids access to "out of school" education and strengthen public school education in order to give kids more non-study time. But time will tell the impact of these policies, what are the positives, are the negatives too harmful, and unintended side effects. "advisory" in China are different than laws. They are kind of best effort, are negotiated and discussed about during actual implementation. And these advisories are updated frequently when they need changing. This is a big reform of education scene, if it is successful it will create a more healthy atmosphere for Chinese kids to grow up in and less burden on families.

Net neutrality is a great example. Paying telecoms to build infrastructure that they don't build and just pocket. The case in Ohio recently where their energy company bribed officials to give them a 1 billion dollar bail out.

Another is any regulation that's not done for the greater good. Like in my state you have to be a licensed bartender and have graduated from a bartending school. Guess who pushed for that requirement? It wasn't the public.

Factions exist in the ccp and having outside concentrations of power can lead to dangerous fragmentation that can also affect the internal politics of the ccp

Ant has China's most dominate online and mobile payment system, alipay. It has consumer lending products like huabei. Ant ties its payment product with lending product, say if you a colleague student buying a $500 shoes on Taobao, you get to the checkout screen, you are like hey $500 is too much for my monthly budget, can't afford this, Alipay then says oh check this out, through Huabei you can get your shoes now only have to pay back a small portion each months. Ant loan money to consumers, then take a bunch of loans lump them together and divide into securities and sell them to other investors, i.e. classic ABS scheme. Ant even says "since we know the consumer spending and payment habits, we have big data algorithm to calculate the rating of the securities and credit score of the consumer". Consumer credit score is supposed to be a check and balance to prevent lending to high risk individuals, security rating allow investors to be confident about the security they are buying. Now Ant financial is the check and balance to itself in both cases.

Through ABS, Ant externalizes all the risk of lending to outside investors. Financial institutions might include Ant's ABS in other securities. A middle class person might buy retirement investments, which have exposure to Ant's ABS. If you own shares of financial institutions that owns Ant's ABS or securities exposed to Ant's ABS, you are also exposed to Ant's ABS. The exposure is everywhere, can't be isolated. From Ant's perspective, they earn a profit from each dollar they lend, so they got all the positives and none the downsides. This could be a reason why Ant lends to consumer who are much riskier than traditional banks in China lends to, and through my experience, riskier than US credit companies lend to. US credit card companies require a stable job, a home or rent, or a dependent with good credit score. Ant lends to colleague students in China that have non of that. Nor do they check the credit rating of the dependent(parent). If the lending goes bust, for example, triggered by an economic down turn, these ABS will drag down everyone exposed to them. Basically how US financial crisis happened, causing suffering 10s of millions of people. The government's action didn't ban Huabei, and Ant. They are just treating Ant as a financial institution, subjecting it the same rules and standards another financial institution (e.g. a bank). The goal is to reduce financial risks. Why is this a bad thing?

The regulators wanted to use existing financial regulation standards, based on Basel Accords, on Ant. But they were on the fence about it because they didn't want to limit a new form of business emerging, or want to limit what a "private" business want to do. But Jack Ma's statement basically called existing financial regulation, and the Basel Accord itself "stupid, out dated, incompetent". In my opinion, that is unacceptable because while Basel accords has its downsides, it's learnings from many financial disasters that caused suffering to millions of people. Its like airplane safety regulations, are they a hassle? yes. But they are there for a reason. And of course a business person will advocate for reducing the rules that limit their ability to earn money, but reducing the rules will increase the risk the entire society will be harmed, especially the under-privileged. A financial crisis triggered by Ant's reckless lending might leave Jack Ma and Ant's executives slightly less wealth, but they sill got all the other cash in the bank. But for a middle class person, the financial crisis will cost them their jobs, their mortgaged home and their retirement savings. And that middle class person didn't do the things that caused the financial disaster in the first place.

Business people will brand their advocacy as something for good, brand things they are against as something old, outdated, cumbersome, use marketing or media power to sway public opinion. Unless you are well versed in financial theory, how can you tell the truth? Most likely that was the final straw. Regulators finally had to gut to required Ant to be regulated as a financial institution similar to a bank. In my opinion, Ant should be regulated like so from the beginning. They lend money, they issue ABS, of course they are a financial institution, subjected to the same rules, same capital requirements like everyone else. Why should they get preferential treatments, not obey by the same rules. The regulators aren't hard liners, they are too weak. They were probably held back by the public opinion about Chinese government is against private industries, so they are afraid to do things that other might say "limit their freedom, hinder private business development, ccp controls private sector etc", including holding business accountable for legitimate reasons. Now these regulators finally have the gut to do the right thing.

MSM tried to paint such picture.

Mr. Ma put that show, because of he knows that the regulators are coming to ANT IPO. And he disappeared because a lot of people are going to be very angry after Mr. Ma failed to push the IPO through. Think a bit, who are those angry men. I guarantee you'll never find the names of these people, thinking them like political power that collectively can rival the infamous Mr. Xi.

CCP is bully.

But when it's bullying the one who romanticize 996 [1], hell, yeah, I enjoy that Mr. Ma gets bullied...

[1] https://en.wikipedia.org/wiki/996_working_hour_system

Membership (2021) 95,148,000

https://en.wikipedia.org/wiki/Chinese_Communist_Party

Seems to scale pretty well.

Regulations should cause as much damage to stock price as possible. We should measure the effectiveness of regulations by how much they tank the stock of affected companies. Real change often affects the profits of corporations. If nothing happens, then I doubt the new rules are actually gonna change anything for the better.

Also, billions of dollars of value didn't disappear overnight. No jobs are or will be lost, and very little utility is lost, except being able to sign up for 1-2 weeks.

I'm not absolutely thrilled by the rise of China either, but we gotta stop lying to ourselves. Not every single action by the Chinese government is a stupid and reckless calamity that will cause untold harm. We're often blind to the good and to the utility of these decisions, and on the balance a government that's not scared of the stock market is going to be more effective assuming they're competent to begin with.

A China with a stable regulatory regime is probably preferable over a China that is prepared to do short-term self-harm in return for its long-term strategy objectives. This just reinforces that there is no transparency in policy-making, and there is no room for capital to act as a tempering voice. Moreover, Taiwan's economy is heavily linked to China - China is Taiwan's biggest trading partner. If China has no regard for domestic or foreign capital and industry, it almost certainly doesn't care about disrupting Taiwan economically and forcing it to submission without firing a bullet.

OT: I see a lot of Chinese experts rationalize recent moves by saying it's all foreshadowed in CCP's public policy goals and so on. If that was the case, I would expect at least domestic investors to have priced-in the impact of the recent changes well ahead of time.

The legal/regulatory regime should be reasonable and predictable, but that should mean human judgement rather than blindly following coded rules like a smart contract. If you're a corporation that's large enough to be impacting society, you should expect society to have a say in what you're doing, and that means that as you do new and surprising things, there will be corresponding regulatory changes.

This is just the normal Chinese gov control everything narrative that people who've basically not spent a lot of time in china tell themselves for whatever reasons.

CCP preserves CCPs power. That's its main focus, it controls what it needs to, to do that. Which it achieves by controlling just the top tier business like 10-20 of them. The other 25,999,980 businesses would likely never hear anything from the CCP in any meaningful way.

This is not dissimilar to how government has fairly significant influence over Amazon/Apple/Facebook etc in the US.

Note: I'm not defending CCP here, they do stupid/bad stuff but controlling every single business is not one of them.

https://www.wsj.com/articles/china-xi-clampdown-private-sect...

I am no expert, but I disagree and I think this is the kind of thinking that has failed the west for the last thirty years. I think the idea started with the fall of the Soviet Union. That culture and ideology was bankrupt. So a lot of western people thought that when there was a free exchange of ideas with China, the Chinese would eventually reject the CCP.

My experience of people in China-- admittedly a long time ago-- was they are generally very patriotic or nationalistic, like Americans. They appreciate the CCP and what it has accomplished. They have a strong domestic arts industry making movies, books, games. Sure lots of people disagree with the party, but that doesn't that they want a western liberal democracy. So lots of people will speak in favor of a benevolent elite and against populism or what they see as western chaos or oppression. When people are against the government, they aren't wishing for a different government system, just less corrupt or more benevolent authoritarians.

Anyway, that is the way I am thinking about these days. But I could be very wrong and I would love to hear from people who are from or spend time in China.

There's more penetration of western media and products in PRC, but vast majority of consumption is still domestic even among educated. And trends show the young are more nationalistic than ever, especially among those with more exposure to the west.

>North Korean style propaganda embarrassing. The disconnect really cannot be understated.

Yeah, folks are embarassed at the style of propaganda, ran by old cadres from for a bygone era. Not the idea of propaganda itself. They want better, modernized propaganda that effectively reinforces nationalism, especially abroad.

What now? China has a pretty extensive film and television industry, and as far as I know it's very popular.

> And they find the North Korean style propaganda embarrassing. The disconnect really cannot be understated.

And in that case, the most logical reaction is political disengagement, which is completely A-OK in the CCP's book.

It's kind of typical socialist thinking that you can have forever revolutionary songs and chants, forever reconstruction and forever community activism (for the party of course). Obviously, that can work in tightly controlled environments such as North Korea, and it looks like they are taking some of that social control back so they can better dictate what they population should do (for its own good as they see it, obviously).

Though implicit in that fantasy is that, without democracy, the blue-state liberal gets to impose his will on the Trumpers. Something that can keep someone like that committed to democracy is (for instance) the thought that the alternative is could actually be a never-ending dictatorship of Mitch McConnell, beating humanity with its chin waddle forever.

> Now I'm not suggesting that this is a good analogy for the Chinese situation, nor that this is how highly education urban Chinese think about democracy (though I do know a few who do seem to think that way). What I am suggesting is that democracy is not always and everywhere the slam dunk win that some Western liberals appear to think it is.

Are you saying that educated urban Chinese are hesitant about democracy because they get to vicariously impose their will (or something close enough to it) on the rabble via the CCP?

I don't think so. Fixing domestic problems is a worthy goal, but it's wishful thinking to believe it will do anything to "effect change in China politically."

Are you implying that the current Chinese system is not repressive, nor capitalist?

Isn't that exactly 1) what the Communist Party wants them to think, and 2) an idea that they can manipulate the information environment to promote?

But you're comparing apples and oranges.

Russia was still a command economy when the Soviet Union disintegrated, and went straight to democracy and capitalism at the same time with very little transition (IIRC, mainly because of the bad advice of Westerners who were too ideological and infatuated with markets).

China has already made the transition to capitalism, so I don't think a political transition to liberal democracy there would entail the kind of economic disruption Russia experienced.

Washington Post and NYT will happily run Adrian Zenz all day long, even though he's a right wing religious nut and they're secular liberals, but you never see them print the majority viewpoint of actual Chinese people.

also note that the bar for success is a lot lower when up to 49% dissent is acceptable

>> I don't see how this is a productive point. "Democracy is best" is 1) what the US government wants you to think, and 2) an idea that they can manipulate the information environment to promote.

> Can they? The US government has very limited "hard" control over what information is published, e.g. there are no banned books in the US and it would be impractical for the government to try to impose any such ban, in stark contrast to the PRC.

Yeah, the massive amount of information control in China has no parallel in the US:

1. Almost all media is state-owned, and those that aren't are required to follow state directives about what and what not to cover (https://chinadigitaltimes.net/china/directives-from-the-mini...)

2. Huge numbers of people employed to implement social media censorship (https://www.theguardian.com/news/2018/jun/29/the-great-firew...: "A considerable amount of censorship is conducted through the manual deletion of posts, and an estimated 100,000 people are employed by both the government and private companies to do just this.")

3. Ditto for books and other publications (https://en.wikipedia.org/wiki/Book_censorship_in_China#Mainl...: apropos quote "In 2021, the Ministry of Education of the People's Republic of China announced a ban on books in school libraries that engage in 'Western veneration'").

4. Requirements that every single website account, network connection, and phone number be traceable to an particular individual's ID (typically implemented by requiring phone number validation). This encourages self-censorship (https://www.lawfareblog.com/shrinking-anonymity-chinese-cybe...).

5. The actual 50 cent party (https://en.wikipedia.org/wiki/50_Cent_Party)

6. Etc.

Sure you can mad-lib a Western country into my comment, but the comparison is facile.

I'm not saying "no exposure," I'm saying they were "better exposed" in the past. You can even see changes like that happening in Hong Kong now, under the new crackdown on civil liberties. For instance, the government is now tinkering with the curriculum of a "Liberal Studies" course in Hong Kong to make it more "patriotic."

> I think we take for granted the supposed superiority of a system that empirically has delivered many recent failures.

Would you trade Donald Trump, Joe Biden, the Democrats, and Repubicans for Xi Jinping and the CCP (and everything that entails)?

it scares me to think about what a more devious version of him could have accomplished. i think he would have caused untold amounts more damage if he were empowered to do so - credit to the US system neutering him then, I suppose I must concede that

i think it is disingenuous to bring up mao in comparison anyway, china today is vastly different politically

The basis is that the authorities can lock you up if you dissent. You have no right to free expression and no chance for a fair trial. You know this and will deny it happens.

I am not saying that for example HK polls are biased pre-NSL (they are because smart people knew what is coming 2047 or sooner), I am fully aware that half the people will support any government, no matter how bad. That also happened in Eastern Europe, so China is not as unique as you seem to think. It simply does not matter. Once dissent is not allowed - or you know you might be prosecuted for dissent in the future, or your family in China might be in danger - you will start self-censoring.

> Where is the massive propaganda campaign?

all over the world. See for example the Confucius Institute network associated with various universities, its overt task is to teach language and culture, but covertly to manipulate and to pressure lecturers and students and basically anyone around to toe the party line (happened to a friend very recently). Many similar stories all over academia, pressuring companies etc.