Alibaba’s Ant Financial, after being in the doghouse for nearly thrree years, was fined a sum of nearly $1 billion dollars related to its freewheeling approach to personal finance following its failed IPO. There was a sense the system wanted to give the platform companies including Alibaba, Tencent and Pinduoduo etc. a clear signal that they can go back to making money. But business is tough for everyone, including these massive online players. One senior manager in one of the companies told us that given the cash shortage local governments are experiencing, the platform companies are being targeted in terms of both fines and taxes to suck as much money as possible out to cover the government costs.
The overall environment continues to worsen and there is a palpable sense of waiting, of uncertainty, as to when this current period of difficulty will end. With the lockdowns of last year still vaguely on people’s minds, many in the middle class and above—people with choices—are in the process of making decisions with regard to the deployment of their assets and children. Increasingly one senses a desire to create an alternative by moving stuff elsewhere. This is not good for China.
America’s Blinken met again with Wang Yi, and it was good to see the talking continue. Meanwhile, Germany issued its long-awaited policy on China, and while it was likely to annoy both Beijing and critics, it at least demonstrated less naivety. Which is a step forward.
Have a great climate changed weekend.