Beijing Tempers Jack Ma

Ma's ambition to have the world's largest IPO was deflated

 

Ant Financial is refunding investors who had applied for the record US$39.67 billion IPO after the offering was suspended yesterday. The dual Shanghai and Hong Kong listing, which would have been the world's largest IPO was suspended less than 48 hours before listing because it may not meet listing and disclosure requirements due to changes in the regulatory environment in China.

Ant Financial focuses on small lenders

It's a shocking development for Ant Financial and founder Jack Ma Yun, and one he could not salvage. But it also shows Beijing doesn't want anyone to get bigger or more powerful than the Communist Party and is doing this to temper Ma.

"The party is flexing its muscle," said Victor Shih, associate professor at UC San Diego. "It's saying to Jack Ma, you are going to have the biggest IPO in the world, but that's not a big deal for the CCP, which overseas the world's second-largest economy."

For foreign investors, Bloomberg says the incident raises questions over the viability of Shanghai and Hong Kong as premium financial centres. The suspension of the IPO comes after Chinese President Xi Jinping said China would open up to allow more foreign access and gradually relax controls over the yuan and capital flows.

Maybe "gradual" means glacial gradual.

Xi said China will open up to foreign markets

The conflicting signals will make foreign investors question China's commitment to greater transparency that is needed in modern, open markets.

But there is also the problem of regulating an innovative hi-tech banking giant Ant Financial. 

Ma, who owns 50.5 percent of Ant Financial has said traditional lenders are run like "pawn shops", as banks always demand collateral before lending. In the future, he said, lending decisions should be decided by big data analysis.

Currently it allows people to pay for goods using Alipay, but it can also help clients, particularly small businesses get access to small loans. Ant's strategy is to earn fees by providing a digital platform for banks to reach small borrowers, and more accurately assess the credit risk.  

But perhaps this concept is too risky -- and it does sound risky -- for Beijing. 

Xiao Jianhua was kidnapped from HK in 2017

As a result Ma was summoned to Beijing on Monday for a rare meeting, and the IPO suspended the following day.

Ant Financial is not the first company to be tempered by Beijing. There are numerous previous examples such as Anbang Insurance Group, HNA Group, Tomorrrow Holding (where the founder was kidnapped from the Four Seasons Hong Kong in 2017), and China Evergrande Group.

Will Ma recover from this? He will have to surrender and lick his wounds, but perhaps Ant Financial is too far ahead of its time. Ma may have to bide his time and keep his head down for a while...

Procrastination at its Finest

The government still can't decide what to do with areas near the waterfront

For years there have been talks about what to do with Hong Kong's harbourfront, particularly on the Hong Kong Island side. The Harbourfront Commission was established in 2010 and essentially advises the government on what to do with the land that lines Victoria Harbour.

It was previously called the Harbour-front Enhancement Committee.

The group had already spent six years studying how best the government could develop the 73km waterfront, and suggested a statutory authority needed to be set up to centralize responsibilities for related matters.

There were big hopes that when Carrie Lam Cheng Yuet-ngor became Chief Executive, she would be more active in moving forward with the commission's recommendations.

Harbourfront Commission chairman Nicholas Brooke

However, last October she did a complete U-turn and said she did not intend to set up the HK$10 billion harbourfront authority.

The most recent news is that members of the Harbourfront Commission were flabbergasted when Rosalind Cheung Man-yee, the Development Bureau's principal assistant secretary for the harbour, proposed a plan to use some of the HK$500 million fund earmarked for harbourfront enhancement to conduct a two-year study exploring various management models, such as cooperating with district-based non-governmental groups and private companies, using overseas examples.

Commission member Vincent Ng Wing-shun, a leading architect was "confused" as to what the study would achieve. He said back in 2008 the commission set up a task force that spent three years looking at suitable models and referenced overseas examples from visiting such places as Sydney, Singapore, Liverpool, London, Vancouver and San Francisco.

"We had been studying it for six years but the government ended up discarding our suggestion," Ng said. "If we now study again... I don't know what exactly we want to achieve in the end. I put a very big question mark on that."

Residents are waiting to enjoy the harbourfront

The commission's chairman, Nicholas Brooke, urged the government to review the plan.

"I sense it's going to be difficult for this commission to endorse this study, if they believe for the right way forward is the harbourfront authority," he said. "How can we support something which we don't think is necessarily the right answer?"

Did Cheung think the commission would readily accept yet another study and allow officials to go travel around -- at taxpayers' expense -- and then write yet another report that would not be heeded?

What we don't understand is what all this foot-dragging is about. Surely developing the harbourfront is in the best interests of the city -- particularly for tourism? The other benefit is more public space for residents to enjoy. Surely they are entitled to access to the harbourfront so that it's not just office buildings and hotels that get the prime spots?

Or is it because Beijing may want control of the harbourfront -- perhaps for security reasons -- and so the government is dragging things on as long as it can so that people will hopefully forget about it?

It's very strange for the government not to move on something as important as this when tourism is considered one of its four economic pillars. This would also be a make-work project, employing construction workers and later establishing businesses along the harbourfront.

Sounds like there's now a stalemate between the commission and government officials, with the latter winning this round...

Out on the Hustings

Carrie Lam's husband (left) denies having any extramarital affairs in the UK

The race to become the next chief executive of Hong Kong is well underway, and all three candidates are out on the hustings trying to shore up as many votes as possible for the March 26 election.

Carrie Lam Cheng Yuet-ngor's husband has already come out to quash rumours that he has a mistress in Britain. Lam Siu-por was asked by Citizen News portal if he had had any affairs before, to which he replied: "I can tell you all that I have no such problems. I have a very close relationship with Mrs Lam."

What kind of question is that?! If there were any pictures or videos of Lam Siu-por with another woman then maybe the media would be justified in asking that, but to ask that outright is bizarre.

Pan-democrats already vow to vote for John Tsang

He had told Apple Daily that such rumours probably arose because he spent so much time in the UK looking after their two sons while she was working in Hong Kong.

Meanwhile the pan-democrats on the Election Committee have decided en masse to put all their 326 votes towards Lam's rival John Tsang Chun-wah. While that's a nice gesture, he would still need 275 votes to win.

All of his nominations were from the pan-democratic camp so he'll have to work hard to get some pro-establishment votes...

Although Regina Ip Lau Suk-yee is out of the race, she is still focusing her energy on criticizing Lam as running a "shallow campaign".

"[The campaign] is insincere, making people feel that it is a facade," Ip said.

Regina Ip continues to attack Carrie Lam in the media

Ouch.

Ip added she felt Lam would not govern Hong Kong well even if she had 800 votes.

"It's too simplistic to say a high vote count could result in effective governance. It is ignorant of the deep-seated problems facing Hong Kong," she said.

Sounds like someone is either a sore loser, or is trying to prove someone is a paper tiger, or trying to piss off Beijing for not cutting her losses earlier.

The next three weeks are going to have a lot of fodder for people to chew on...

Mr Pringles' Platform and Zhang Dejiang's Meetings

John Tsang officially announced his platform today

Everyone's eagerly talking about the race for the next chief executive of Hong Kong. While many believe it will be Carrie Lam Cheng Yuet-ngor who has the upper hand, they have a preference for former Financial Secretary John Tsang Chun-wah.

They call him "potato chips" because he looks like the logo of Pringles chips, a man with a moustache known as "Julius Pringles". Many feel he is more down to earth than Lam, who revealed how out of touch she was when she took a taxi in the middle of the night from her Convention Centre serviced apartment back to her old digs on The Peak to get toilet paper.

Tsang revealed his platform today, promising electoral reform, but also he would enact Article 23, the contentious law on national security that was shelved in 2003. He would give tax breaks to SMEs and allowances for low-income families.

Some believe that he is still favoured by Beijing, otherwise why was he kept on as financial secretary when Leung Chun-ying became Chief Executive? They think that Beijing had a hand in having Tsang stay on...

Zhang Dejiang had meetings with Hong Kong heavyweights

A friend said she liked Regina Ip Lau Suk-yee and we asked her why. She said she's a hard worker, and she has had a tough life -- her husband died young so she was a single parent raising her daughter. As for trying to implement Article 23, she was only doing what she was told to do.

Others like former judge Woo Kwok-hing's personality, but feel he might be "too delicate" to do the job of chief executive in terms of health. They fear another Tung Chee-hwa situation would happen. But he definitely has better Chinese calligraphy skills than the other three candidates.

Adding to the mix is the National People's Congress chairman Zhang Dejiang, who is also the state leader overseeing Hong Kong affairs, go to Shenzhen to meet with influential Hong Kong businessmen and pro-Beijing political parties.

His visit comes a week before the nomination period for the next chief executive begins next Tuesday.

While people who attended the meetings refused to divulge what was said, they would only say it was normal for Beijing to want to know people's opinions on things.

Uh huh.

John Tsang biting into his pineapple bun in Tsim Sha Tsui

The fact the visit was announced after the fact is also curious, but we will leave it at that.

In any event, the other day Tsang visited one of the first three food trucks that have opened for business in Tsim Sha Tsui and got a pineapple bun for HK$20. While he said it tasted good, it was expensive for HK$20.

Excuse me? Isn't he the one who wanted to bring food trucks to Hong Kong? It ain't cheap to set it up, at a minimum of HK$600,000 in start-up costs alone.

Maybe his platform should include measures to prevent landlords from jacking up rents so that small local eateries won't go out of business!

Does the Liaison Office Get Hong Kong?

Wang Zhenmin has been stationed at the liaison office since January

The Chinese government may have people on the ground in Hong Kong gathering information about the people and the city, but it doesn't seem to want to try to understand what's going on.

At all.

The legal head of Beijing's liaison office here said Hong Kong is ill and needs medication, caused by the growing talk of independence -- which he ruled out for "1,000 years and forever".

It's either 1,000 years or forever. Which one is it?

Wang Zhenmin believes those advocating Hong Kong's separation from China are acting out of fear that the mainland's success is eclipsing the city's.

Sixtus "Baggio" Leung says Wang's comments are "laughable"

Someone really has his head above the clouds.

"Hong Kong's prosperity and stability is largely because of the motherland," he said. "Some people then think that now the motherland is developing well, Hong Kong will go downhill. It is heartbreaking to see some people going for extreme means to destroy Hong Kong."

Err... no one is really thinking that theory, Mr Wang; it is rather that Hong Kong people are tired of our dependence on the mainland and Beijing meddling in our affairs. None of us wants to destroy Hong Kong, unless the mainland has other plans for us.

He went on to declare Hong Kong would remain a part of China "for 1,000 years and forever", and that no one could break them apart.

Sounds so romantic and yet does Hong Kong have a choice in the matter?

The Basic Law expert said Hong Kong should serve as a role model for the country's economic and democratic development, along with the rule of law.

"If the 7.3 million people in Hong Kong mess up democracy and only bring extremism, violence and separatism, how can the 1.4 billion people on the mainland pursue democracy without fear?"

Is he insinuating there will be democracy in China?

Rimsky Yuen says advocating separatism breaches Basic Law

And he shouldn't he give us credit for no violent incidents on September 4, the day of the Legislative Council elections when 2.8 million people turned out to cast their votes?

Wang is the same person who raised eyebrows in April when he warned that those who discussed independence for Hong Kong in a "large-scale" setting were not only violating the Basic Law, but could also be committing "treason" and "sedition" under existing criminal laws.

That set off a debate on whether talking about separatism was considered "sedition", and the Secretary for Justice Rimsky Yuen Kwok-keung warned that advocating independence was a breach of the "relevant" provisions in the Basic Law, and incompatible with the legal status and overall interests of the city.

While Wang said he was open to discussing whether "one country, two systems" should continue after it expires in 2047, he revealed that he personally preferred to maintain the

status quo.

Localist lawmaker-elect Sixtus "Baggio" Leung Chung-hang, who advocates self-determination, dismissed Wang's take on the rise of separatism as "laughable".

"When we discuss the question of independence, we are driven by the invisible hand from the Communist Party that is meddling with our rights and freedoms," Leung said. "It has nothing to do with China's economic strength."

While Wang was here at the University of Hong Kong from 1993 to 1995, and served on the Basic Law committee from 2006 to 2008, his recent time here only started from January this year.

Perhaps he feels he has to play up the rhetoric because of his position, but that just only demonstrates Beijing's lack of sensitivity to the issue or a belief in the heavy-handed approach will bring bring stray attitudes around.

Not.