China wants to have greater control of its technologies and is taking measures that limit the actions of large companies in the sector. Alipay, the payments giant owned by Ant Group, is one of those affected.
The Chinese rulers are not very interested in the business of credits and microloans that are made in Alipay, but in the financial data of their clients, that is why the government of Xi Jinping wants the Ant group to give them the information of its users.
The objective is to create a new independent application, but for this Ant will have to provide the information, which in many cases is automated, and on which its decisions to grant loans are based.”
According to the publication made by the Financial Times, Beijing is planning to close the Alibaba Payment App to found a new credit company where the State would be a shareholder.
It is the first time that state-owned organizations have sought to remove a “substantial stake in Ant’s credit rating joint venture”, aiming to institute a “personal credit rating company in which Ant and Zhejiang Tourism Investment Group Co Ltd will each own 35 % of the company, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold just over 5 %.”
Last April, the regulatory institutions asked the Ant group to transform its business into a “financial holding company”, ordering it to divide its two areas. One of them is Huabei, which works in a similar way to credit card companies, and the other is Jiebei, which is dedicated to microcredits.