Monday 16 November 2020

Jack Ma & China's Capitalist "Regulatory" Regime

There are several ways of looking at the mighty hiccup just suffered by the great Jack Ma's corporate empire as the Chinese authorities thwart the epic IPO he had scheduled for Ant Financial Services.


1.  One in the eye for Chinese dreams of FinTech domination

Not really.  Theirs is a specialist domestic financial sector, and it doesn't depend on Ant, or Ma's other corporate vehicles having free rein.  Word is, the authorities are toying with transition 100% to a virtual currency.  Now that's the big development to be watching for.  (Can it be done?  Much like Xi's Social Credit dream: easy to conjure up over a beer, and to recognise the advantages that would accrue to the CCP - if they could make them happen.  The practical difficulties, however, are legion, and they advantages almost certainly not what they think.  Law of Unintended Consequences looms very large.)

2.  See, the Chinese can't do Due Process

Errr, I think we knew that.  The CCP is quite explicit: it recognises no higher authority, in this world or the next.   So (a) there will always be a lot of business China will never get, for this very reason.  

Then again (b) neither can several other countries do Anglo-style Due Process, e.g. Germany! - as we've discussed here before.  HOWEVER, no end of western companies "who should know better" kow-tow for Chinese business like there's no tomorrow (and I chose that simile with precision).  Marxists always scoff at this: the capitalists will sell us the rope with which we will string them up!  Haha.  Yeah, always gets a laugh.

3.  So it's just like Russia, then?

Sort-of, but slicker.  Yes, after a few nervous years in office, Putin got to the point where his terms for the oligarchs were - remember, мои друзья, you cannot overstep the mark I lay down.  The CCP built the whole of its capitalist regime - or rather, stood back and watched its capitalist regime develop spontaneously under the freedoms they rather prudently granted - on the same clear understanding from the very start.  Mr Ma may have been wondering whether he might just be big enough to think otherwise; but ... 

4.  At least no blood was spilled

Now we're getting closer.  How much more civilised, how virtual (virtuous?) to put a spoke in the wheel of an IPO, than to put a bullet in the back of the head.  (But we do know that's in the toolkit too.) 

5.  OK, but not a proper capitalist regime at all

Can't agree.  Capitalism is the human economic activity that thrives whenever and wherever there is space for the ordinary person to profit personally from their own ideas and keep enough of the proceeds to represent personal capital.  No implication whatsoever of unlimited licence.  Works best with Due Process, but works pretty well in less 'formal' frameworks, too.  As the Chinese have proved magnificently over the past 30 years.

6.  Any lessons for us?

Not really; because in both the paradigm economies of the Anglo capitalist model (US and UK), private businesses ultimately operate under the possibility of direct governmental intervention, often with very little resemblance to Due Process.  A brief engagement with the history of the nuclear power sector since it was supposedly 'privatised' will leave you in no doubt on that one: and very many more examples could be adduced.

Oh, and many folk heartily wish our government would also intervene against Due Process earlier and more often.  When it suits them, naturally ...



Anonymous said...

I'm not sure there aren't lessons for us - namely ones we gave the Chinese.

The British Empire, at its height, controlled enough world trade to politically control swathes of the world, and had enough military force to enforce that trade where necessary.

The Chinese found that out the hard way, and whilst the Opium Wars were small change for China, they were from a Western power projecting its power on China, something they have never forgotten, and are always happy to trot out for a bit of reinvigorating any flagging national fervour.

China wants to be like that, the world trades with China. On Chinese terms. And if anywhere in the world doesn't like it, then Chinese terms will be enforced.

Enforcement by bullet at first, enforcement by social contract afterwards.

Contactless and mobile phones has shown them we prize convenience above all, Facebook has shown them how easy it is to manipulate us, and both have shown them we are willing to enter into a devils bargain to be surveilled. Orwell dropped in the modern world may well be bemused by wittily captioned cat photos, but he'd have had the measure of the Zuckerbergs.

We have given the Chinese a set of blueprints on how to dominate the world, both with and without force.

As to whether they can successfully go through with it, I have no idea - I would hope not, but then I wouldn't bet against them.

We can counter them - it's just whether we will. One of the few things Trump did that was a good idea was waging economic war against them.

E-K said...

It's not just tech billionaires that the CCP dominates but whole (free) nations too, when it comes to criticism.

Who can deny that this Communist/Capitalist hybrid has been stupendously successful ?

I dislike it but if I were a Chinese (even a poor one) I would be feeling extremely proud and optimistic right now. A hard, energetic and disciplined people. And I'd rightly be demanding my place at the top table and Xi Jinping must certainly know that he needs to distribute the rewards among his people.

The failing of the Capitalist West is the soft bodies and the soft minds produced by the soft food and Hollywood soft sentiment. This has fed back into the democratic loop and so our own democracy is leading us to Leftism.

And the lies.

That CV-19 is a failure of capitalism. It's the reverse of the truth, in fact, but one has to marvel at how the CCP is controlling Western news on that too.

Anonymous said...

OT, but who knows examples of colleagues losing a well paid job for the most ridiculously petty fiddling? I knew a guy who was fiddling his overtime, lost a very well paid job for a few hundred. But this ...

"He is said to have gone to the fruit and vegetable area and used the self-service scales to obtain a barcode sticker for carrots with a price of seven pence. He stuck the carrot barcode on the donut tray and scanned it at a self-service checkout so that he was charged seven pence for the donuts instead of £9.95, it is claimed. Pc Read is accused of acting dishonestly and without integrity by knowingly paying seven pence for the donuts when he knew he should have paid £9.95."

I guess he'd done it successfully before. But if you're going to do something sackable, go big or go home.

E-K said...

7p for carrots. Bargain.

Keep 'em peeled

As Shaw Taylor used to say.

Don Cox said...

As for capitalists, this story about the funeral of a Zimbabwean millionaire is entertaining. I believe Zimbabwe has the biggest gap between rich and poor of any country.

Don Cox

Nick Drew said...

@ colleagues losing a well paid job for the most ridiculously petty fiddling?

in my very first Proper Job, the departmental boss (who was a very senior player in a big oil company) impressed me greatly. He was calm, decisive, approachable, delegated well, commanded strong loyalty etc etc

just before Xmas in my first year, he disappeared from view, and 'the word' was, he was a bit off colour and resting at home. Weeks became months: his 2IC was elevated to acting Dept Head. Eventually he 'resigned' to take up a job selling insurance to VIPs.

Later, it trickled out that he'd been caught with his fingers in the expenses till. Petty? Well, I'm guessing this was for a bit more than the odd donut - but it was certainly ridiculous: he was on a good screw, in the days when access to the Golden Trough was pretty comfortable living; and was next in line for the Board.

Back to the territory of Keith Best MP, see Jailbirds I have known

andrew said...

The 90s
I worked next to the comms team (3 people).
We published a lot of booklets that were printed by one of a group of local printers.
The more senior two of the team suddenly disappeared.
Turned out that they had an arrangement with some of the local printers whereby the bill had 10% added and their own fast-growing ad business got a 'credit'

Timbo614 said...

Talking of the 90s, in 1990 I got a really nice job because someone was fiddling stupidly. I got their job, their car (with car-phone), and a night out a dinner at Le Manoir aux Quat'Saisons!

His crime (a final straw I think) - sitting in the car outside his own house using the car-phone to make personal calls - mobile calls were very, very expensive back then! and he ( then I) was 25K + the car + pretty generous expenses.

As for the copper - stupid & fully deserved.

As for the Chinese version of capitalism we do not know our peril.

Sorry Nick seem to be pursuing the off topic bit again at least I don't have a new song for you :)

Nick Drew said...

Great to hear from you again, Timbo.

it's a blog - sing if you wish!

phil5 said...

The 90s again, London IT contract market roaring away. A permie IT dept manager at a Japanese investment bank had an arrangement with one of the contractor agencies whereby the agency would hike the rate and split it with the manager.

Timbo614 said...

I'm recovering Nick, The last 18 months have been a $hit time. 18 months ago my wife was diagnosed with pancreatic cancer. The NHS DID work for us she is still here and 95% OK we are waiting for yet another scan to determine what is causing a new little "hot spot". 5 month ago our son of took his own life he was 45. He was always a bit fragile.

But I do feel that I'm on my way back now. Life goes on but Covid has not helped at all. I blame it partly for our sons death, he always needed a lot of support and as both me & the wife were instructed to shield so we didn't see him for 3 months because he wouldn't put his Mum at risk given the cancer recovery that was underway in Feb/March.

I knew I would write this here one day and the fact that now I have tells me I am in recovery. Sincerely thanks for the blog to CU, "Bill" and yourself I'm so glad that I stumbled on it in 2008?? Wow, 12 years ago!

Best, Timbo,

Jan said...

Sincere condolences from me.....what a year you've had. I do hope things get better for you and your wife from here........

Nick Drew said...

and our best to you & Mrs T, Timbo

to give C@W even an iota of credit for giving you a bit of a staging-point on your recovery path is very humbling for us

good on yer

Anonymous said...

Very sorry to hear all that, Timbo. Prayers and best wishes for and to you all.

2020 has not been a good year. I think we've counted 14 deaths among family, friends and acquaintances, only one of covid, although another was perhaps due to covid-related hospital cancellations.

The economic and social fallout of the lockdowns is hardly started.

Boris's tweet of Jan 2 telling us what a great year it would be did not age well.

"Events, dear boy, events"

E-K said...

Sorry to hear of your loss and suffering, Timbo.

Timbo614 said...


>> "Great to hear from you again, Timbo."

It is this sort of thing that makes the blog different - nowhere else could you go AWOL for months on end and be greeted back even when you don't contribute to the collective knowledge very often. It is also the most polite and courteous one that I know of.

Timbo614 said...

Jan, Thanks.

Anon: Thanks for your best wishes.
I feel quite sorry for Boris, he swept in on his white charger only for Covid-19 to immediately shoot his horse from beneath him. He's been dumped in the mud all plans completely awry. Never in his worst nightmares could his premiership have been so hobbled by circumstances.

Despite the cock-ups (that are almost guaranteed in "unprecedented" conditions) I still think he is doing as well as can be expected. The one thing I am surprised by is the continuous sniping and put downs along with "does he think we have a money tree!" when it is blindingly obvious that we do indeed possess such a thing during emergencies.

Timbo614 said...

I know you went through this a while ago with your Dad passing. Thanks. I hope things have now improved for you too.

BlokeInBrum said...

Timbo, my condolences too.

I have to disagree with you about Boris though, I don't feel sorry for him at all.
The exceptional times that are upon us has given him carte blanche to do whatever he wants with respect to events around Brexit and his handling of Covid.

Yet he has been curiously absent most of the time. Reacting rather than acting. Where is the leadership?

I voted for Boris and the Tories in the hope that he would rise to the occasion and that he would bring his wit and intellectual heft to bear on the many, serious issues that we have. Instead he has been pushed around by all of his advisors. Now we find that the P.M's girfriend is calling the shots in Downing Street. When it gets to the point where I think I would run things far better (seriously) then I think we have a problem.

Next year there is going to be an avalanche of people out of work and small firms going under, swiftly followed by tax rises to pay for the enormous, crushing debt that we have rapidly accumulated. Yet the powers that be are bickering about maintaining our overseas aid at 0.7% of GDP and relaxing the requirement for immigrants coming to this country.

We gifted Boris an 80 seat majority and the benefit of a crippled opposition party, yet this is the best he can do?

andrew said...

I, too voted con.

Boris has spent his life lying, cheating, philandering, treating rules as things that apply to others, playing the room for laughs, cocking things up, hiding when in trouble, and exiting stage left shortly before shtf.
Except this time his timing went wrong - or his luck ran out.

His performance has not disappointed me. It indeed has been the best he could do.

My grief for the needless destruction of this nation's future is mitigated by remembering the alternative at the last GE was (even) worse.

so sorry, losing a child is something I do not have words for.

E-K said...

Tim, Things have much improved since then, thank you. The old boy was a controlling character to say the least.

I think you'd do a far better job in government too !!!

Anonymous said...

My condolences Timbo, death of a family member always hits hard, and I can't imagine the loss of losing a child.