Jack Ma has built his fortune disrupting the status quo. In just over two decades the entrepreneur has helped to revolutionise China’s economy by changing the way millions of its citizens buy, sell and invest. This time, however, the limelight-seeking billionaire appears to have flown a little too close to the sun. Mr Ma’s swipe at China’s state-dominated banking system, just days before the expected flotation of Ant Group, his online finance business, caused consternation in Beijing. The result has been the dramatic suspension of Ant’s market debut.
Beijing’s eleventh-hour decision carries obvious risks. Predictable regulation helps to underpin confidence in markets and the economy. Unexpected changes, especially if politically-driven, are usually damaging. By, in effect, bringing Mr Ma to heel, Beijing has shown two things: one, no individual or company is more important than the state, and two, its central priority is to ensure domestic economic stability.
The tussle with Ant is also a high-profile example of the wider global debate over regulation in digital banking. Most of today’s challenger banks emerged after the 2008 crisis. Their slick, web-based offerings contrasted sharply with the frequently poor service of traditional lenders. The pandemic marks the first downturn to confront the new entrants. It should have been an opportunity to grab market share. Instead, indications in Europe at least are that established banks have benefited from a flight to safety.