This incident seems to be a mark in the column of the old argument that authoritarianism is bad for economic growth because of the ever-present potential for capricious action such as this.
While we should take the WSJ's preliminary reporting with a grain of salt, the Ant IPO halt was shortly followed by the announcement that Beijing was going to be looking at antitrust and monopolistic behavior by big tech. [0] The 'angered Xi and the old guard' narrative seems very plausible.
Also, if anyone's interested, here's a translation [1] of the speech Jack Ma gave that set off the commotion. Interesting bits about what he thinks of incumbent financial powers (or at least, what he says to that audience). It's also interesting to see what relatively mild comments could trigger this kind of reaction when power is so centralized.
Authoritarianism is bad for business, there are plenty of examples where big businesses get "nationalized" or where the founders are forced to sell to a "friendly party official" who then proceeds to run it into the ground.
Russia notoriously is very good at this, leading even innovative companies to sabotage their own growth as to not become an "acquisition target" of the ruling elite.
There is also the "creative destruction problem" where an innovative company is beating an incumbent, but the incumbent happens to be partially owned by party cadre and leverages its power to shut down the innovator.
In my humble opinion, the security and protection of property under the rule of law should be a human right as it's the core driver of economic growth.
> There is also the "creative destruction problem" where an innovative company is beating an incumbent, but the incumbent happens to be partially owned by party cadre and leverages its power to shut down the innovator.
A country doesn't need authoritarianism to accomplish this. Many democratic countries have a long history of very similar behavior.
Even a company with the resources of Google found it difficult to establish their own ISP in the USA. So did local governments within the USA. Famously, Google said it could not have been founded in Britain due to their onerous copyright laws.
The incumbent merely needs enough money to shut down the competition; with money comes influence and capability. Different countries require different strategies, all of which need money. If you're in China, you join the party to crush opposition; if you're in the USA, you bribe Congressman to regulate them out of business (or just sue them); if you're in Mexico, you send your armed thugs to kill the leaders.
Authoritarianism lowers the bar for the effort that it takes this kind of thing to happen though. It takes a lot more money and effort to do it in a system where power is less concentrated than one where it is centralized since there are more actors you have to coordinate with.
This simple fact is constantly overlooked by people who wish To expand government to stamp out corruption when the corruption lies in the centralization of power.
And it's likewise often overlooked by those who oppose regulation who fail to recognize when power is centralized by corporations which are even less accountable than a democratic government.
> which are even less accountable than a democratic government.
I've never seen a politician 'held accountable' for doing something I don't like in a democracy.
I'll pick out George W. Bush who (with massive public support) charged in to the Middle East, glassed one or two countries, set the US up for 20 years so far of ruinously expensive wars. He served two full terms. I might have seen an article sometime recently that he had taken up painting and is pretty good at it.
What level of accountability am I expecting him to be held to for that? I think those may have been some of the worst political actions taken in my lifetime. When you say "less accountable" - what do you think shows a democratic government being held accountable? I like democracy, but I don't think the government is accountable.
Corporations are actually held accountable. If they screw up, the owners can lose out massively. Executives too through incentive programs.
I don't think you're using "accountable" in the same way. A corporation is accountable to its owners in its quest to make more and more money. If making more and more money means doing unethical (but legal) things, many owners will have no problem with that. That's not a good situation.
Corporations are only accountable if they fail to make money. Unless they're too big to fail, in which case they're accountable to no one.
It's all well and good to pick a blatant example of a politician doing evil and getting away with it; on the flip side I see politicians at the local level losing re-election for doing things their constituents don't like. In any event, I'd much prefer democratic accountability over corporate accountability when it comes to entities who have the ability to take away my freedom or deprive me of life.
I do agree on that - but if you are using local politics the fair thing to do is to compare it to local businesses. If you are going to rule out the big parts of politics rule out the big businesses too (which renders the argument a bit moot).
I actually agree that war was a disaster, but he was held accountable to the electorate and won an election after having started the war. How much more accountable do you want? Every single voter in America had the opportunity to express their opinion and together they chose to keep him in office.
Corporations absolutely are held to account. The US is holding hearings on the tech giants at the moment. Apple is in court over the App Store. Microsoft got smacked down over anti-trust. Banks and google have been fined billions of dollars.
Theres a reasonable case that these sanctions were not sufficient, but that's just an opinion. Other people's opinions differ. Sorting that our is what democracy is for, but we cant always expect it to produce the results you or I personally prefer.
We might be in furious agreement on a couple of points here. I've been choosing my words fairly carefully - I want some sort of justification of the idea that the government or anyone in it is somehow accountable for anything.
If accountability means everyone sort of shrugged and moves on over the single worst barrage of decisions I've observed in US politics in the last 30 years then either it isn't accountable or being accountable is irrelevant. I'm pretty sure the government is unaccountable by design - it does whatever the polity wants that day, and then there aren't any meaningful consequences if the idea worked out or not. Democracy represents the best thing we have, but I don't accept that it represents accountability. Good people can get voted out and replaced by better people, for example. Or term limits kick in. They represent the electorate changing its mind on what approach to try in a no-fault-implied manner.
Corporations actually have a built in accountability - if they don't have customers onboard with the idea that they are providing goods and services effectively then they disappear and their owners get hit right in the financials. I can see that in the companies I deal with - they do what I want quickly and with no fuss by and large. They are accountable to me - if I don't like the service I go elsewhere and that is their loss. I can't see it in government, and I'm not seeing anyone in this thread who has managed to lay it out for me. Most of the politicians representing me I would dearly like to replace for their many and obvious failings. They certainly aren't accountable to me, and I don't know anyone who they are accountable to or I'd spend more time trying to argue my views to that person.
> Corporations actually have a built in accountability - if they don't have customers onboard with the idea that they are providing goods and services effectively then they disappear and their owners get hit right in the financials.
Do they? The continued existence of most American telecoms and insurers would appear to prove otherwise.
Really, the issue with American politics is that presidential incumbents rarely get challenged by their own parties, and the two-party system is terrible for providing any sort of nuanced choice. Bush's legacy was truly punished in 2008, when America elected the most serious looking anti-Bush candidate running by one of the largest electoral and popular vote shares in recent history. (Both Hillary Clinton and John McCain were successfully painted as not anti-Bush enough during that campaign season.) And generally speaking American democracy doesn't outright prosecute former leaders, because generally speaking the government does not like the appearance of political retribution.
John Kerry was also not a great candidate to have run with an anti-Iraq campaign plank, and 2004 was too soon for most of the country to have soured on the war.
Actually corporations (companies) are a legal structure invented to allow multiple investors to contribute capital towards a certain goal and have rights guaranteed by law rather than purely contractually. The limited liability is also to protect investors.
Concentrating capital to achieve big projects that founders wouldn't be able to fund themselves is clearly beneficial for economic growth
> Actually corporations (companies) are a legal structure invented to allow multiple investors to contribute capital towards a certain goal and have rights guaranteed by law rather than purely contractually. The limited liability is also to protect investors.
Untrue; the law of partnerships, which is older than corporations, already allowed people to contribute capital to a goal and have their respective rights governed by law. The legal arrangements are different in a corporation, those differences centering around the limitation of liability—the freedom from accountability—provided to the investors.
That freedom from accountability is the central focus of the corporate form. And it's arguably an aberrant path dependency; had we had limited partnerships first, the idea of business form where no one is ultimately accountable for the liabilities of the business—rather than one to which investors could contribute with limited liability while the active principals remained fully accountable—might never have seemed like a good idea, even to the investor class.
You still don't have a legal instrument (a share) that you can freely transact and has attached rights.
It's maybe important to realize that when the amounts get bigger and the projects riskier that the personal liability becomes meaningless.
What happens if you are personally liable for a 10 million eur debt... well your life is over, but also nobody is going to actually get their money back from you cause you are not able to pay that.
I think it's quite rational for a society to say that you will lose everything you have in that business, but the investors/debtors can only pursue you up-to this point. Especially when taking on riskier projects that require lots of capital.
Not sure corporate executives are particularly held to account either.
For example, Carly Fiorina wiped half the value of HP away but was given a massive payout to leave the company. I’ve seen estimates it was in region of $42m.
Ok sure, but that poster said - quoting again - "which are even less accountable than a democratic government"
So you're arguing that we don't need to hold GWB to account. Fair enough, there were mitigating circumstances. But then in what sense is the government accountable for anything?
Corporations and government are both held to account through the courts, I suppose. But the government will often change the rules so it isn't accountable (eg, wiretapping scandals), so that is a weaker form of accountability than a corporation faces. Is there an actual meaty argument to the idea that governments are more accountable than corporations? Because I'm drawing blanks on the times when a government was held to account for anything in a manner that wouldn't also apply to corporate actions.
I think the idea is that we don't vote for people like Bezos, but they have a lot of power over us all the same (even if we don't directly give them our money).
Bezos has developed a corporate behemoth that distributes goods at good prices, at absurd convenience, and as an encore provides web infrastructure for countless other businesses. I don't really have any stats, but it seems plausible the logistic chains he oversees saved a fair number of lives in the current pandemic because it reduces the need for people to contact each other.
Given that record, I think there is a better argument for putting him in charge of the US healthcare system than putting the people in overseeing the healthcare system in charge of Amazon. Bezoscare written by Bezos would likely be much more effective than Obamacare written by the US Congress.
And I still don't see the argument that the US government is somehow more accountable than he is.
The mistake in '08 was preventing the banking system from purging the idiots who were taking on too much risk. Protect the people, shred the corporations is my motto for financial crisii. And here is the roll call for "A bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets" [0]. I'm no expert on Senate procedure, but H. R. 1424 is TARP and that looks like the final vote to me. On the list I do spy "Biden (D-DE), Yea".
So whatever accountability the government faces it isn't enough to stop someone becoming president.
I'm sticking to my point here - I don't think the government is held accountable in any meaningful way for its screw ups. not_kurt_godel's opinion needs more support on this. If the government hadn't stepped in, a lot of banks would have lost everything in 2008 - they were on the verge of being held very accountable and I'm still grouchy that they weren't. The government should not be in the business of buying worthless assets.
These banks had to be bailed out because the ripple effect would destroy the economy and that would have been very disruptive even to companies and individuals that had nothing to do with the housing crisis. Even with the bailout, many suffered.
But I agree with you that the way they bailed them out did not hold them accountable, they should have "invested" in those banks by buying newly issued shares which would have completely wiped out the existing shareholders.
However, rather than the normal way to raise capital, they gave a blanket permit to the federal reserve to buy the bad debt from the banks.
The US government and the people by extension should have become the owners of those banks which they could resell the ownership again on the private market with a profit at a later point.
> Corporations are actually held accountable. If they screw up, the owners can lose out massively. Executives too through incentive programs.
Ha! Is that why climate crisis is being driven by 100 companies? What's your excuse for that? Some outdated Malthusian analysis of it being the consumer's fault for not "voting with their dollar?" which is an outdated and foolish libertarian argument Marx eviscerated long ago? A system where each person has one vote will be more democratic, even if corrupt, than a corporation which is not. You talk about centralization of power as if you cannot decentralize economic control democratically, which is exactly what the socialist/Marxist prescription is (please don't bother replying that "socialism/Marxism is when the government does stuff, like owning all the business," because that's an all-too-common misconception).
We have regulations because businesses often will do whatever they can get away with and are not accountable due to how much money they can make and are ran entirely undemocratically. Child labor laws. 40 hour work week. Safety regulations. Prohibition of leaded gasoline and leaded paint. Etc. These are examples of the state enforcing some degree of accountability onto businesses and it has been for the greater good of society. Without the state doing this these corporations could get away with anything (and often do get away with pretty much anything, anyway, due to material conditions, but removing what little protections we do have under liberal democracy would make things even worse [just look whence we came]).
Even in your own example of "corporate accountability," that accountability is coming from the government. Moreover, what's left of your argument is just saying "vote with your dollar," which hm:
> In 2019, families with net worths exceeding $1 million owned 79.2 percent of all the household wealth in the country. The bottom half of American families held just 1.5 percent of the wealth.
I could cite statistics like that all day. If your answer is to "vote with your dollar," then it's plain to see who has the most voting power! What's left then? To out-compete those with a dominion over material and the means of production?
Is that why the few billionaires who run the show, because they ultimately they control the material conditions, are able to control the means of production and basically make everyone bow to their demands to an extreme degree, barely curtailed only by a dwindling bourgeoisie democracy which the working class can only faintly tolerate. Why they pour tons of money into influencing electors and politicians? Also, I hope you don't give the libertarian argument "well corporations only get big an evil because the government exists!" Due to the way commodity production/the commodity form works, it is something which consolidates over time, and as we have seen some examples in history, enterprises which get large enough eventually establish their own rules and become the de facto state.
Is that why less than ten corporations own almost all the brands people are familiar with? That is not how commodity production works. The evolution of the commodity form has been one of competing commodity producers, where one will always lose out and have to sell their wage labor to the winning commodity producer and the existing commodity producers absorb the labor power, means of production, and continue expanding in a way which someone starting from 0 can not overwhelm. This is the economy of scale. You can cherry pick "disruptive" technologies all you want, but if you look at who holds most of the wealth in the world (a handful of billionaires), and their control over various industries, what I'm saying becomes extremely apparent.
Also your example doesn't even make sense--the war indeed had massive support--we're talking about democratic accountability as in doing what the people want. You're simply playing with words at this point, you're asking if we can try an elected official we elected into office for something that had popular support at the time? Does corruption in the state happen? Yes and often. But by default, corruption is the name of the game in corporations whose sole purpose is the profit-motive under dictatorial/elite rule, or at the very least, rule by profit incentive.
When you leave the devices of power out of the hands of voters, you just let the profit incentive and a shrinking minority of billionaires control things--we literally made a device that separates rich people's heads from their bodies over this (to establish liberal democracy).
The answer is not more totalitarianism, but more democratic control over the economy and government, not less.
What a load of rubbish--shame to see stuff like this on Hacker news so often, likely due to out-of-touch petite bourgeoisie (as many programmers are), lending them to reactionary bents.
It's extremely reactionary to look at the over-centralization of power and say "ah, the solution is to give more power to corporations which already dominate the material conditions!" Again the solution is to further decentralize power by making the economy and enterprises democratic (and to increase the level of democracy present in the government). You can just gather that from a basic anarchist and Marxist analysis.
I was discussing how to handle economics in light of automation the other day, and at one point we joked that every household should have its own family robots which go to work and bring home a salary.
The major question on my mind is, should we distribute power by a democratic vote over orgs which control a collection of resources, or should we do it by distributing ownership of resources with individual freedom to commit those resources anywhere? Is one more efficient, or less likely to centralize, than the other?
Deregulation spurs competition which your centralized corporations hate and actually fight in favor for all the time. The chief lobbies for Obamacare was healthcare monopolies like Blue Cross.
Not to mention they don’t have the threat of jail, military, police, and other coercion to use against you.
Truth is the two work hand in hand. Big corporation loves big government
That is not how commodity production works. The evolution of the commodity form has been one of competing commodity producers, where one will always lose out and have to sell their wage labor to the winning commodity producer and the existing commodity producers absorb the labor power, means of production, and continue expanding in a way which someone starting from 0 can not overwhelm. This is the economy of scale. You can cherry pick "disruptive" technologies all you want, but if you look at who holds most of the wealth in the world (a handful of billionaires), and their control over various industries, what I'm saying becomes extremely apparent.
>> Even a company with the resources of Google found it difficult to establish their own ISP in the USA
That's because other companies were using their control over government to prevent it. We need a system where government actually governs and yet doesn't directly control or get influenced by companies. I have no idea what that looks like.
Depends, what you described in democracies is called "regulatory capture" and is usually only possible because politicians have a tendency to regulate and then rely on existing big players to find a regulation consensus.
Notably absent of those advisory boards are non-existing future companies. It's relatively rare for regulation to kill off businesses in democracies.. at most it's to boost barriers to entry.
In China and Mexico where the rule of law is selectively applied, incumbents do kill competition outright.
Democracy and the rule of law provide a considerable level of predictability. Google knew they couldn't work in the UK, but knew that they could succeed in California. Not everywhere needs to be conducive to every type of business or opportunity, as long as people and capital are free to flow to the places they can be effectively used for a given purpose. Fundamentally Capitalism is simply individual equal freedom of action within the law, freedom of association and respect for property rights. All the rest of capitalism just flows from respect for those basic principles.
The problem with authoritarianism is that not only does it have all the regulatory limiting problems of free capital democracies, but you also can't even rely on those rules, at all, because a leader can overrule them at a whim at any time.
» Google knew they couldn't work in the UK, but knew that they could succeed in California.
Sort of tangentially related, this reminds me of a story (not sure if it is true, I don't even remember the source for it) that movie-making became centered in California because the creative people wanted to not be forced to follow some onerous patents of camera manufacturers or something.
Edit: Wikipedia article for Hollywood also says this:
» In the early 1900s, most motion picture patents were held by Thomas Edison's Motion Picture Patents Company in New Jersey, and filmmakers were often sued to stop their productions. To escape this, filmmakers began moving out west to Los Angeles, where attempts to enforce Edison's patents were easier to evade.
I don't think you're describing authorianism so much as centralized power. Private property does the same thing, it just chooses who has power using a different metric. Somebody with a lot of property can do the same stuff, except where laws prevent them, but it's the laws doing the protecting, not your own property
What you really need to avoid these issues is ways to distribute power. Anti trust, democracy, checks and balances, etc where lots of people to agree
No, but you can make that their suppliers break contract, their clients move away, etc. One can force a sale simply by making business untenable. Monopolistic and anti-competitive behaviors can happen without breaching private property laws, this is why government has to also fight anti-competitive behaviors.
The cost of doing this in a democracy is more difficult. The cost of extortion is lower in an authoritarian regime because there are fewer people to bribe.
Only the modern experience would lead you to believe that. The gilded era is a good example of how forced sales and/or abusive monopolies are not incompatible with democracy at all.
Talking to friends in China, there's actually a fair amount of understanding and support for the government. They value stability and the massive leverage ratio Ant was working with scares a lot of people about financial instability - the 2008 great depression is still quite vivid for a lot of decision makers
> there's actually a fair amount of understanding and support for the government
You have to thank disinformation and mass brainwashing for that. The fact that there is virtually no opposition in China says how far they have gone to control people.
> Eg. The lack of opposition to the idea that water is wet does not imply that water is in fact dry and everyone is just brain washed
There's no world in which no opposition actually exists when there is a little bit of freedom. You can observe it even in small groups where people can express themselves: you won't have a single convergence of opinions on every topic.
Theres no way to know if they have considered the alternatives, because it is illegal to even present or discuss any alternatives, and illegal to ask them about it.
If your response to people holding differing opinions is that 'They are obviously stupid and misinformed and brainwashed', I don't think that any productive discussion can be had. I can, after all, say the same thing about anyone who disagrees with me.
I like when people strawman my points by adding 'stupid' where it was not written and implied anywhere. Smart people can be equally brainwashed.
You cannot have productive discussion with people who have no access to different sources of information. The CCP completely controlling education, media and the Internet makes most people in China in a very bad position to access facts versus pure State propaganda. Add to that a strong social pressure to conform and punishment for divergence and yes, you have mass brainwashing going on.
It's great that you can recognize obvious biases in the information available in another culture.
Now, do you not think that we have any relevant prevailing biases, created by our education, media, history, culture, economic system, and government? [1] Ones that are so deeply ingrained in our society, that we don't even notice them?
If we were to apply your rubric, that would make arguments between people from different cultures completely unproductive - with each person hailing from each culture being able to dismiss the other's out of hand.
The argument you are dismissing as brainwashing seems pretty straightforward to me. It's entirely possible, even reasonable for economic stability to be a goal worth pursuing for government. You may find it anathema, but that viewpoint isn't particularly privileged, in the global space of ideas.
[1] That's a rhetorical question - of course we do. They are incredibly obvious to anyone who's lived in a few different countries.
> Now, do you not think that we have any relevant prevailing biases, created by our education, media, history, culture, economic system, and government? [1] Ones that are so deeply ingrained in our society, that we don't even notice them?
The difference is the key though. In the West we know that we are brainwashed at some level, because we can observe it happening around us with people who share different viewpoints or cultures.
However, in a country where there's only one discourse that is accepted, you can mistake your own brainwashing for the actual truth because nothing is out there to make you think otherwise.
Great point. I find culture itself is 'brainwashing'. It is just influence on your thoughts/who you are. The term brainwashing brings a good amount of negativity and polarism. It's not something that happens to 'us' but 'them'.
We are all brainwashed to an extent. Knowing that can at least prepare you to bring a good scrub and soap on your washings.
The question however is the decision was based on lending fears? (as it is not connected much to the IPO only the valuation) Or it was an ad-hoc personal decision of Xi because Ma started to overgrow him.
The problem with authoritarianism is transfer of power.
You can get an enlightened ruler once in a while (the expected value of competence is still a lot lower than in a democracy). But long run it devolves like other despotic countries
Kinda, Lee Kuan Yew was prime minister from 1959 to 1990 (and died in 2015, RIP). Goh Chok Tong took over in from 1990 to 2004, and Lee Hsien Loong has been in power since. It's been 30 years since Lee Kwan Yew left office.
Is Lee fils really so different from Lee père? I mean, he's probably a better mathematician, but has he done anything one couldn't imagine his father having done?
There was a TV interview in mid-00s in which the airhead interviewing LHL was really curious about how mad he must have been that Goh had led Singapore for a few years before he took over, and he grew more and more embarrassed as he assured her repeatedly that no, it hadn't been any sort of insult. Hilarious.
> Is Lee fils really so different from Lee père? I mean, he's probably a better mathematician, but has he done anything one couldn't imagine his father having done?
Lee Hsien Loong has been trying to soften his image since he took office.
Two examples: the press ceasing use of military ranks for all politicians (I remember him being addressed as Brigadier-General (Ret.) before), and his wearing of soft pink business shirts whenever he has to make an address.
You have to looks things in perspective. He did way better in almost every metrics as compare to neighboring countries. Show me which EU countries did better in Covid. I would like to see your benchmark.
Taiwan, Vietnam, and Thailand are neighboring, and they've had fewer deaths per capita. (Taiwan has had seven deaths on a 24M population!) [0] But that isn't the point I made. Do you think Singapore under LKY would have performed significantly differently in its response to such a health crisis? I don't.
"Neighboring countries" is not the EU. You also can't compare island countries with smaller populations to large land locked ones. Taiwan and New Zealand are probably the best comparisons
Disagree in the general case. Instability costs money, and incumbent players with better access to capital can survive more easially. On the other hand, stability in regulations make it easier for a start up to derisk themselves as there will be a well built up series of case law around the relevant regulations.
Now, if you mean technology instability, completely agreed. That's where innovation comes from.
I think Uber's a perfect example. Taxi regulations either have been stable or essentially unenforced for decades in most places. This gave them the opening. However, everyone getting a smartphone in 2010-2011 is what really blew the doors open.
At the risk of moving the goalposts, if what you're saying is true, then I disagree with the premise that "stability is good for business" is a good thing. This kind of "stability" leads to stagnation and ossification, which I consider to be negatives in any society.
You’re thinking of a different kind of stability. I think OP was referring to thinks like a stable financial system, legal and law enforcement and economic policy.
Those are generally good for new businesses too. Who wants to start a new business when someone comes by and changes all the rules suddenly?
The problem with this claim is that it is not that easy to see it in the evidence. While nearly all the richest countries are democracies and nearly all the poorest countries are dictatorships, the causality could go the other way - or something else could have made countries both rich and democratic. If you look at growth rates you don't see big differences. You have to work quite hard to find differences (though some people think they can: https://www.journals.uchicago.edu/doi/pdfplus/10.1086/700936).
> Authoritarianism is bad for business, there are plenty of examples where big businesses get "nationalized" or where the founders are forced to sell to a "friendly party official" who then proceeds to run it into the ground.
I think this may be true but I would like to see a better argument for it. It is not hard to find businesses that have been successful specifically due to authoritarian State patronage (e.g. Huawei in China, Chaebols in South Korea).
First of all, you are asking me to provide a better argument for another case altogether.
Authoritarianism is bad because it enables party cadre to outright steal businesses (expropriation) and protect incumbents.
The case you want me to argue authoritarianism is bad for business is where the state is buying goods or services and picks a winner by providing state patronage.
The short answer here is that when the state picks winners, they are screwing themselves because the incentive to innovate disappears in companies that managed to attain "regulatory capture".
There is also a significant incentive for big companies to merge or bid on government contracts as a joint-venture (e.g. Airbus, United Launch Alliance) because they can form a price cartel.
That the state does not break up these cartels and goes along with it is because politicians are generally not too savvy and most likely a good amount of corruption is involved.
Anti-trust laws are used to protect consumers and businesses, but ironically I haven't seen them used to protect the government as a customer.
That's almost the main point, to be bad for business. Specifically business coming from a foreign dictatorship that is hostile to our businesses, threatens national security, etc.
To some degree, yes. One difference is that the proposed buyers are not owned by those in power, so that direct financial benefit is not the motive for forcing the sale.
> the security and protection of property under the rule of law should be a human right
Well, it is - although the extent to which this should extend from humans to corporations is debatable. Otherwise you end up with situations like Philip Morris suing Australia over their anti-smoking policy.
Most Australians found the argument that plain packaging laws amounted to an unconstitutional acquisition of tobacco companies’ intellectual property ridiculous. Ultimately, the courts agreed, but the argument does follow from the premises often accepted by people who emphasise the primacy of property rights: that the government can’t take them without compensation, and that they include rights to commercially exploit trademarks and copyrights.
Ideas do not have the same dynamics as real property (scarcity). Rather than being an example of property rights, copyright is an example of government undermining property rights. The concept of real property rights predate nation states by thousands of years. Just because a government says that black is white does not make it so. “Intellectual property” are weasel words, of the same tradition as “people’s democratic republic”.
No, I’m agreeing with pjc50 that claims like “the security and protection of property under the rule of law should be a human right” deserve skepticism, if they mean that Western democracies should provide more legal protection for property rights than they already do, because that’s what the tobacco companies wanted and it would have been bad if they got it.
The word 'privatization' was coined to describe Nazi Germany's economic policy[1], and Germany went from a country with serious inflation, to seeing high returns on investment[2]. Violent states often makes friends with business owners.
> there are plenty of examples where big businesses get "nationalized" or where the founders are forced to sell to a "friendly party official" who then proceeds to run it into the ground. Russia notoriously is very good at this, leading even innovative companies to sabotage their own growth as to not become an "acquisition target" of the ruling elite.
Equinor (Statoil) and Gazprom seem to have produced results that can only be described as precisely the opposite of being run into the ground.
> Russia notoriously is very good at this, leading even innovative companies to sabotage their own growth as to not become an "acquisition target" of the ruling elite.
Lately the US doesn’t seem like a good place for businesses to become “too successful” in either. See the banning of TikTok and all the ruckus about forcing Apple to open the App Store or breaking Google up etc.
>"In my humble opinion, the security and protection of property under the rule of law should be a human right as it's the core driver of economic growth."
Economic growth and well being of the majority are not necessarily the same thing.
This doesn't sound all too dissimilar to what happened to Tik Tok.
2020-06-21: A Trump rally in Tulsa is reportedly trolled by people on Tik Tok.
2020-08-06: Executive order issued banning Tik Tok in November unless it can be sold to American stakeholders.
2020-09-14: Oracle is reportedly in the lead to acquire Tik Tok.
2020-11-12: Department of Commerce puts stay on the executive order.
There's a lot of talk about national security issues and whatnot, but the timing between Trump losing face and Tik Tok almost being acquired by American interests is just too convenient to ignore.
The stability of contract law is essential to a well functioning market and the actions of this administration are just plain gross.
TikTok is a foreign company and the president has unrestricted power in foreign affairs.
I am happy to agree with you that the president should have also restricted power abroad in let's say something like an overarching trade agreement that puts checks and balances on individual states.
This is true, but there are also plenty of cases where big businesses have propped up authoritarian regimes because they fear someone else more. The best historical example for this is Hitler; his rise was heavily supported by big and small businesses that feared left wing groups would cut into their profits[0]. This is part of why Hitler was able to rise despite never commanding an overwhelming majority.
0 - To be somewhat fair to the big businesses, there were actual communists running around Germany trying to get a revolution going there too, and that would be very bad for business too.
Communism is an extreme version of authoritarianism, officially executed in the "name of the people" but in reality executed by a revolutionary command of max 10 people.
In interwar Germany, there were also old imperialists who didn't value democracy too high that were more than willing to ally with Hitler.
It wasn't just businesses, it was also the church who rightly feared prosecution from the communists.
There were very few pro-democracy parties in interwar Germany and NSDAP was the only one with a huge militia that would be able to defend against a communist revolution.
The army was too small because of the treaty of versailles.
You could argue that businesses picked the least-worst option among a plate of very bad options.
The point of a business is to pool resources and make profit (add more value then taken away) and return money to the shareholders (make wealth)
Power can be a side-effect because you make A LOT of money and people are generally happy to do things for money, but generally businesses are not political and are dependent on their political environment.
Specifically the "return money to the shareholders" part can be affected by weak rule of law and weak property laws
>authoritarianism is bad for economic growth because of the ever-present potential for capricious action such as this
so are severe financial crises that threaten the political stability of the country in question. Preventing private businesses from doing X or Y is only 'bad for economic growth' in a trivial, first-order sense. The more important question is if whatever measure was taken contributes to the long term health of the system.
The CCP is, rightfully, very afraid of reckless lending or highly leveraged financial transactions because the country lacks a solid infrastructure to cope with a financial meltdown, which has always been an issue because the private financial sector is such a mess.
It's not that they're scared of reckless financial transactions it's that they're worried about not being the ones carrying out those reckless financial transactions.
I assure you, the CCP cares very deeply about keeping China's economy stable. Moreso than the typical congresscritter, if the past few months is anything to go by.
The worst thing that could happen to a senator, should they royally muck up, is that they lose their job. The worst thing that could happen to the CCP, should they royally muck up, is that their top brass might lose their jobs, wealth, and maybe even lives, if they let things get bad enough - because their system has few other safety valves.
If the argument is "authoritarianism is bad for big private businesses" then sure (although even that is debatable considering how much protectionism can help local industries at the expense of multinational ones), but looking at China's economic growth over the last few decades and how many people it has lifted out of poverty, I can't see how you can call it a failed economic system.
That happened under an purposeful period of liberalization. Xi Jinping has been pretty clearly walking that back. Moving towards a more authoritarian direction isn't going to cause the Chinese market to fail overnight, but here we have a pretty clear example of how it is impeding growth.
Or he’s trying to avoid the pitfalls of western liberal democracies. You may not agree with the means, but saying that the Chinese market is slowly failing is a pretty grand claim to provide no evidence for.
Didn't he basically make himself dictator for life last year by removing any term limits for him "as long as the party voted him in". If you oppose him now there's a good chance you're kicked out of the party, and that's the least of the punishments.
Kind of, in the sense that yes, growth was stunted and even reversed for decades. But the starting point was low. The war with Japan and earlier revolutions to overthrow the Qing government weren't kind to economic activity, and the population basically limped into the 1940s with barely functional physical and financial infrastructure.
As I responded to someone else :
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China was actually quite wealthy under the Qing Dynasty, and fluctuated between 10% and 35% of global GDP.
In 1949, when the PRC was formed, they represented 9.5% of the global economy. In 1990, after 41 years of Communist Party rule, China was 1.59% of the global economy.
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So while it is accurate to say that China's economy did poorly in the 19th and early 20th century, it is also true to say that the CPC proceeded to drive the nation into abject poverty.
Always ignored in similar discussions, in 1950 the US convinced the UN to establish an embargo against China lasting for twenty years. Mao's economic policies were undoubtedly terrible, but the Western destruction of the Chinese economy did not stop in 1949.
I feel you are misrepresenting what happened. As I understand it the PRC did not want this conflict and tried to prevent it, but failed. They were basically forced into the conflict by the Soviets and the Americans and suffered immense losses.
The UN coalition army that refused to acknowledge China's existence, invaded China's neighbor and marched to China's border. That does not justify twenty years of an embargo.
That is factually untrue. The war began when North Korea invaded South Korea.
As I said, the PRC's policies are what drove its people into poverty. It was a choice the PRC made to attack the UN armies, it chose to do so fully aware of the consequences of supporting North Korea and Kim Il-sung.
>That is factually untrue. The war began when North Korea invaded South Korea.
Which led to almost everything that happened in my post, the UN had already refused to acknowledge China. Nothing factually untrue in it at all.
>it chose to do so fully aware of the consequences of supporting North Korea and Kim Il-sung.
Mao called the decision blackmail at the time, and it's a fairly apt description. Imagine the hell that would be raised if China helped a Mexican despot and marched an army to the US border.
Charts on China's historical relative share of GDP and other measures beg to differ. Or at least they suggest that the first derivative matters a lot more than snapshot numbers.
Nobody's defending that repression and misguided autocracy weren't pure stupidity and self-flagellation. The 'Great Leap Forward' of the late 50's caused extreme damage to life and economy, compared to the west rebuilding and setting up the first pieces of a transition to the digital economy, and the rest of East Asia gearing up for its own export-driven 'miracle'.
But in general, social and economic things have momentum, and that momentum in infrastructure, technology, education, reserves, everything really, had stagnated and was thus in a downward relative spiral vs a rapidly developing west since the 1800's. After WWII, China had a quarter of the production capacity of the late 20's, a mostly illiterate and increasingly angry rural population, and hyperinflation. There was no golden goose to slaughter.
Wow. You totally ignored what happened before that, which led to the CCP takeover.
How about the fact that the British and the Americans and all the other western governments were shoving opium down their throats? And they were making a pretty penny from all of it. The criminal British empire made their riches from drugging China with opium.
China was actually quite wealthy under the Qing Dynasty, and fluctuated between 10% and 35% of global GDP.
In 1949, when the PRC was formed, they represented 9.5% of the global economy. In 1990, after 41 years of Communist Party rule, China was 1.59% of the global economy.
You cannot blame that on opium or the west, that is the result of Communist policies like the Cultural Revolution and the Great Leap Forward, to say nothing of the ruthless control and censorship of information.
And 1949 is a weird time to try and measure economic output numbers. Half the world in ruins, and China itself being mostly illiterate peasants.. you have a cite for that number? Does it have a dollar figure per capita?
It's interesting you say this because it was always recommended in ancient China to minimize the involvement of the official court in merchant business as long as they pay some sort of tax to keep up the income (such as salt). It is well known that if the there is too much government involvement in decisions, corruption overcomes growth which lead to a lot dynasties eventually failing (a good example is the Qing dynasty/last dynasty of China).
I don't how much the main stream media are reporting the real underlying issues surrounding these 'on the surface' storms. It is definitely not 'capricious' for us to know in Zhejiang. The 'unofficial / underground' finance world has long become a problem. Big news such as the sentence of Yu Ying, a multi-billion yuan business woman https://en.wikipedia.org/wiki/Wu_Ying, revels a large unregulated network in the east region (nicked named '包邮地区' because all products shipped from here have free delivery). China is definitely lacking in terms of regulation and laws (for non national bank related financing). If you visit my region you will see so many (private/independent) banks operating pop up in the past 20 years. Lending is potentially a very big risk. With Ma's famous optimism and cartoonish ambition it was obvious the gov will step in, the timing is definitely catching a lot of attention...
In a struggle between big private capital and big state, I would refrain from supporting either side. Also, I doubt this action is over mildly critical rhetoric.
Another point:
> authoritarianism is bad for economic growth
* Economic growth is not a virtue or something positive in its own right.
* Authoritarianism is bad for many reasons, but being detrimental to something which is not in itself positive is not one of those reasons. Adopting an extensive regime of repair, reuse, recycling and energy frugality might also be detrimental to economic growth (as we currently evaluate it), but that doesn't make it disfavorable.
Authoritarian responses rarely just say “they pissed me off and must be punished”, at least not in public. Really effective autocrats will often mix a bit of truth into their accusations; it’s entirely possible that there is some monopoly behavior there and that the trigger was Xi is angry about being insulted.
> This incident seems to be a mark in the column of the old argument that authoritarianism is bad for economic growth because of the ever-present potential for capricious action such as this.
As always predictability is essential: Measured and consistent regulations can be accounted for, capricious 'regulations' cannot be.
>People go to jail in today's China for nothing more than mispronouncing Xi's name
Can you provide evidence for this? I find it very hard to believe they're tracking this insignificant level of dissent, and evidence suggests that China has a lower prison population than USA despite having many more people.[0]
This is how downvoting ruin any nuanced discussion on China.
China is very complex. By sheer number it should be 4X more complex than US. Not mentioning many other internal issues.
For example, Chinese people are very diverse in their understanding of the world. And intellectual level in China is very low compared to modernized countries. That makes the management and ruling a lot trickier than US. One often cannot argue reasonably with some random peasant if he/she happen to not educated. My father used to fight with me, when I told him that his was investing in some ponzi scheme. And he ended up losing ~40% of his lifetime saving. He just cannot believe in such thing as blatantly bad, as he has some faith in the society in a way that is rooted in 50-60s idealized period when he was growing up.
People here often do not allow nuanced discussions. Any comparison in favor of China to US or other western nations is implicitly labeled "whataboutism".
The sad thing is that, HN is already the best I could find...
To me, authoritarian regimes look much more plain, simple, and strightforward in their motivation, unlike civil societies with their tricky political maneuvering. Xi's mind is an open book in comparison to deciphering a fuzzy collective thought ethos of any democratically appointed cabinet.
When I told my classmates in 2012 that China is going back to revert back into "redness," unless the remnants of pre-reform China would be decisively proactively stomped out, people laughed me out.
Now, almost 8 years later, those people call me out on facebook how in the world I saw it.
I did not change the explanation: the most ruthless, militant, and headstrong faction in the party cannot be expected just to give up, no matter how much political castration they suffer.
People to whom killing tens of millions is an acceptable price to stay in power, will not be scared of breaking some toothless legal regulations.
Getting more power is a raison d'etre for such people, they will never give up on seizing power peacefully for as long as they live.
>Xi's mind is an open book in comparison to deciphering a fuzzy collective thought ethos of any democratically appointed cabinet.
You can't possibly think that xi is ruling by himself like a God.
Dictatorships have just as much of a fickle, constantly changing hivemind as any other form of government. you might just have one ever running party, but look inside and you'll see a complex network of factions.
There are 91 million people in the party, and more who want in. Getting party membership is a big part of getting ahead. (Edit: It's not a hivemind is what I'm saying here.)
> Edit: It's not a hivemind is what I'm saying here.
Perhaps I didn't use the best term, but it seems you're saying the same thing I did? My point was precisely that the actions of the party as a whole aren't collective actions directed by a single person's mind (xi's) but rather the sum of all the party members ideas and political movements, so it's just as complex as a democracy.
No one needs party membership to do anything in private sectors...
Why the hell people still think about Chinese live like party farmed animals. For God's sake, get on YouTube search some Chinese speaking videos by normal people.
You are so echchambered that I start pitying you...
I think you misunderstood me here, I was trying to emphasize how big and varied the party's interests are. People often frame it like a singleminded machine.
I don't live there but I've heard a lot of people say that party membership is useful, not necessary mind you, for lots of business endeavors.
There's a whole other conversation about the differences in representation between the two countries, and I think China's system has some points in it's favor as far as "does this government act on behalf of it's people", but I was just trying to phrase things in a way that would get through to the typical HN reader.
So how do you describe a hundred thousand people in a stadium saluting a flag? Or a squad of US soldiers tearing down a statue or posing with a corpse?
"It's also interesting to see what relatively mild comments could trigger this kind of reaction when power is so centralized." ? Funny! Do you know how much power Jack Ma has and how much impact he can make to his country? The product of his "mild comments" and his power is significant!
While that's a problem the completely dead US anti monopoly regulations are one that is just as bad. A reminder that Bell labs invented magnetic storage in the 20s and buried it because they thought people wouldn't talk on the phone if they could be recorded.
Maybe it is. But I would not say we're setting a strong example for "predictability" at home; in fact on that front I think China has a much stronger argument. There are other virtues in life, of course.
This is what happens when you go on stage with a rock band act like you play the guitar, when you are not. I guess the music is over and the lights came on. Learn your lesson Mr. Ma - and fall in line.
The Ant Has been crushed. I say Reign them all in. China govt has figured out that the giants indeed to kill innovation and industry.
Down with them all. Fb, Goog, Amzn, Baba. All you HN folk who work for any of these toxic companies - may god have mercy on your souls when you leave this earth for the digital atrocities you have committed and been a part of.
> The only standard to evaluate this system is whether something is universal, inclusive, green, and sustainable. The cutting-edge technologies backing this standard, like big data, cloud computing, and blockchain are already ready today to take on this huge responsibility.
Looks like Jack is not being entirely honest here. Blockchains are not a "green" technology.
> It's also interesting to see what relatively mild comments could trigger this kind of reaction when power is so centralized.
I haven't read "Mao's thoughts" on the distinction between practice and theory [edit: skimmed it, pull quote below] (c.f. Jack Ma on "documents" vs "policy" "experts"). For God's sakes, this is Communist China, a Marxist party, and a country with a tradition of proverbial parsing of tea leaves for hidden and subtle meaning. And it is a direct attack on the very purpose of the Party. Manage the country's growth and future!
--
So, what is Jack Ma's thought crime? What is the issue with his "empiricist" mindset?
"There were also a number of comrades who were empiricists and who for a long period restricted themselves to their own fragmentary experience and did not understand the importance of theory for revolutionary practice or see the revolution as a whole, but worked blindly though industriously." - Mao Tse-tung
> This incident seems to be a mark in the column of the old argument that authoritarianism is bad for economic growth because of the ever-present potential for capricious action such as this.
And yet, compare the economic growth of India to China, or Yeltsin Russia versus Putin Russia. Or look at South Korea's economic miracle in the 60s -> 80s, under a repressive, authoritarian regime.
All things considered, authoritarianism seems to be able to hold its own with respect to economic growth.
And in this case, a strong argument can be made that this is the bad kind of economic growth - the kind that introduces systemic risks through the economy, by overleveraging credit. 2007 says hello.
I don't get it. In the west, 1- we ask for tight regulations of banks and financial institutions to prevent them from screwing their creditors and the whole economy; we also 2- lament the corrupt system that prevents the government from applying serious anti-trust rules to companies that have become entirely monopolistic in their behaviour and mindset: Google, Apple, Amazon, etc.
But when China does 1 and addresses 2 with antitrust rules, then we criticise the authoritarian state that stunts economic growth and private entrepreneurship...
What people are criticising is the manner of rule-enforcement. The IPO got to a late stage of the process before being personally halted by Xi. Rules being unevenly applied and being dependent on the whims of the powerful is what is harmful.
Ants lending business has doled out 1.8T on 36B of cash from Ant itself. That's 50 times the leverage they financed through ABS, Asset Backed Securities, or in this case more accurately described as Debt Backed Security. We knew all about these 'financial innovations' in 2008.
The new regulation limits the leverage cap from infinite to about 15, closer to bank's 10. This limits risk, and is considered a reasonable move.
A truly desperate move would be to allow these bubbles to go ahead and IPO. Which almost happened, everything will be fine and dandy for a while, until it's not. Whether it's due to Xi's insecurity or not, I'd say that China dodged a bullet here.
Lending out vast sums against a small reserve is not necessarily bad, depending on how the deals are structured.
In the US, banks issue credit in the form of credit cards. But they don't hold on to it. They create special-purpose entities (SPE) which then buy credit card debt, funded by bonds sold to investors. The banks do not hold on to much of the credit card debt.
The yield of these bonds issued by the SPE is commensurate with the risk of default of the credit cards. In this case, the bank issues billions and billions of credit without the reserves to handle high defaults. But it's OK, because they sell off the debt, so it can no longer directly consume their reserves.
Any losses on that credit card debt affects the value of the collateral backing the bonds issued by the SPE, not the bank. So the investors of the SPE are on the hook, but not the bank.
These bonds backed by the SPE are not rated AAA. So the real question is regulating the leverage of the investors buying the SPE bonds. But that can be handled separately, and need not restrict Ant's ability to issue microloans and then sell them off to securitized pool trusts.
The ratings risk assumptions and who rates them. not valuing 'unlikely' tail risk because 'no way people won't pay their mortgages' or the 'no way a virus will have force over 30% of the population functionally un/underemployed with no assistance.'
And who owns the bonds? What happens when pensions, investors are hit?
And who sells the derivatives and CDO 'insurance' and the meta CDO of CDO bets on the debt? My guess would be lots of bank on bank, institution on institution incest.
And presumably they have to keep these assets on book at least for a bit in order to structure the tranches or whatever the credit card version of that is.
I love the film Margin Call, this scene is great:
"Well... sir... if those assets were to decrease by just 25 percent, and remain on our books... well... that loss would be greater than the current market capitalization of this company."
"the music appears to be about to stop and we are going to be holding the biggest bag of stinking shit ever assembled in the history of capitalism?"
"the music, so to speak, just slowing, if the music were to stop, as you put it, then this model would not be even close to that scenario. It would be considerably worse."
" and I'm afraid... standing here tonight... that I don't hear... a... thing... just silence.
The US ran an enormous financial bailout after the pandemic started. This was when individuals got $1200. Substantially more of that money was spent ensuring corporate debt didn’t pop.
The rumor in China is that the new regulation is going to come out regardless - and Ma wanted to stop it from becoming reality - which make sense, large collateral will reduce profits of Ant, which primarily drive profit through consumer lending.
But why so late. Why let him do ipo up to the point that us$70m interest Ws lost to the investor doing margin to subscribe to ipo. (Margin needed as one want to max chance get a fee share. Not margin trading just in case.)
it is not as rational as one thinks. Something is going very serious wrong here. The regulation might be in the pipeline but if so any alert in the ipo on due diligence.
These might be a PR spin to cover up using a rational argument for some other things.
You're assuming "good faith" in listing risks in the IPO document :-) Companies generally list risks from the fear of being sued by shareholders, not from goodness of their heart. And recall this listing was not in the sue-happy jurisdictions like US.
The devil is in the details. I am not sure it is an apple to apple comparison here. Ant seems to have far more data about users so that its credit score is crazy accurate.
The credit scores are accurate now, but what if a recession happens? Similar to subprime mortgage, if housing values keep going up there wouldn’t be any problem even if people defaulted. But the economy as a whole can change and your credit score based on when economy was well is suddenly useless.
The article follows the expected lines that hint Xi is kind of a dictator and is afraid to face any challenge from outside (which obviously satisfies the taste of my HN readers), but fails to ask the real question.
The real question that begs for explanation: The new lending law doesn't come out from nowhere. It was not drafted overnight, and was not drafted without the consultation of the target of regulation -- in that case, I'm also sure (but without hard proof as I'm just nobody) that Ant was one of the companies that the government inquired. So the real question is: Did Ant know about the regulation when it files for IPO, and if so, why didn't it disclose it?
A second question is: Ant and similar countries have been growing for years and years. Why does the government slam down the regulation in this year? This might not be a legitimate question though, as regulations usually come far behind, so it might be reasonable for the government to act slowly in this case. But still, I believe it's about time that some anti-monopoly law fells on head of companies such as Ali and Tencent. They are wayyy more powerful than they appear to be.
The new regulations are sorely needed, previously they only covered actual banks and not self proclaimed 'fintech' companies.
Ant gets to bankroll its lending by packing loans it just made into bundles and sell it as security with yields of 5%-6%, whereas the actual interest on these loans are around 14%-18%. There's no brake on this system and they can lend out practically infinite amount of money and transfer all risks to banks/asset management firms and consumers.
There's no chance that Ant can proceed through IPO with this new regulation as the profit structure of the business has fundamentally changed.
Absolutely. My take of the events is that Ant and other major players were able to slow down the legislation all theae years (because they have a world of cash) and when it eventually managed to get out Ant tried to push through IPO as soon as possible. That was probably one of the fastest IPO.
Same as in Russia, or Brazil, or Argentina, or Mexico, or lots of other places.
Sure, if you show up from USA with no local language skills and no experience living outside of Milwaukee, and try to live exactly according to the explicit law, it's exactly like you say. But people actually from there have ways of navigating these obstacles. There's more potential for unpleasant surprises (for instance kidnappings) but if you know the lay of the land you can do alright. Maybe not advance that fast, these societies are not very upwardly mobile unless you're really REALLY acclimated and subscribed to the system, but they're still functioning societies of humans that need to get along, and if you can be cool, you can get along too.
What some Americans think they're entitled to do, which I've seen people try to do for instance in Small Claims court in US, is penetration test the legal system. They want to hack the legal code, instead of obeying fuzzy norms, common sense, suasion, and avoiding hacks that are seem too good to be true, they are magnetically attracted to these hacks. They then feel cheated when a judge oversteps his power ever so slightly to protect the integrity of the system from hacking.
Get real, China has tons of experience with usury, which is itself an Advanced Persistent Threat of the legal system and society, and if the borrowers wanted to default, the courts and social fabric would be what made the lenders whole. So of course the Chinese government is entitled to kill the IPO, it's a shitty and usurious IPO, and they'll be the ones holding the bag, so better to nip it in the bud.
Exactly - Russia, China, Indonesia, Turkey and other countries have tons of beaucratic regulation but in real life they are rarely vigorously enforced when you are small and keep a low profile. Then, when you grow you can pay for rules not being enforced. Only when you get really big the system is comming for you as in the case of Ant.
This is acctually convenient for some enterpreneurs who understand the system as it makes it easy and cheap to start small and experiment, see how the things work out.
This is the reverse of Western systems where usually small guy is expected to bear the costs of all the rules and regulations while big corporations get free pass.
So the Ant IPO situation was to be expected this way or the other. Mr Ma had been trying to cash out but he had been to slow to act.
I would like to point out that this is also true in the US, not just the bad guy countries listed below. For example, in the US we have criminalized: walking across the street in various circumstances, riding a bike (on the wrong part of the street, without a helmet, on the sidewalk, without a light), spitting, cursing, being loud, driving too fast, driving too slow, and a million other things. There’s basically 0 chance of any person living an entire day and not breaking some sort of minor law. This is repeatedly used in the US to justify things like stop and frisk of minorities.
Depends on where you are. If you land in the metropolitans or the provincial capitols then it's a lot better. The more remote you go the more local connections you need to do things. That's why some areas are actually completely avoided by investors.
When people say "China" sometimes they don't realize that China is as diverse as the whole Europe (but under a central gov) so there are a lot of discrepancies among different areas.
I don't think illegal is the right word to describe it, especially for P2P lending. It is a new thing, and it makes sense there is no legal framework to regulate it. The government has to watch how it lays out. In fact, in the last few years, many regulations have been introduced to regulate these companies. China is run by engineers, with new challenges appear every day, the legal system will always fall behind.
The article is not only suggesting the new financial regulation was drafted overnight, also the anti-monopoly regulation. If Chinese government works at this speed, there won't be anything it could not do.
Actually restrictions have been put into places over a few years. At the beginning, it was wild west, then companies need to have insurance, companies cannot hold the money, it has to put the money in an account overseen by a financial body. It is not true that the government has been watching the whole thing over the years and only take action now. If you read news, you could learn that the number of these companies have dropped from 3k to 15 and now below 10 due to regulations being put into places and bursts.
I'd suggest putting the "but unfortunately ..." bit after the link (or leaving it out); as it is, it sounds as if the relevant content in your link is going to be at the end of the page and and hard to find, and I almost didn't click because of that.
I didn't find it very convincing. The stimulus wasn't diverted by the finance industry to itself. The government set up a system where monetary stimulus comes from the central bank, and fiscal stimulus comes from the legislature. Congress sent out one big round of stimulus checks. The Fed increased the money supply by buying bonds, the way it always does. Congress could have done another round of fiscal stimulus, but declined to do so. There was no obstacle, other than the fact that our freely elected leaders decided not to do it, and did not pay a political price for it last week.
I can't speak on the China stuff, but the initial comments about the origins of money are quoting from David Graeber's work without saying so. That's all true, though Cory is giving a bit of an oversimplified version.
I’m not sure how much I buy into his analysis. It’s a lot of hyperbole and technical term dropping.
His whole theory is that Jack Ma was going to go forward with an IPO the gov’t would never let happen. So why was the IPO date still scheduled up until this speech? Why wouldn’t the govt pull the approval from the beginning?
Govt is not a singular entity, not in US, not in China. Xi is one person and he can't run the whole country by himself.
I don't even think Xi's work involved any particular IPO, the stock exchange and regulators on that level rushed the process likely knowing what's to come and having huge amount to gain from it. Which made them competing interest against the central government, and in the murky waters local/lower level functionaries often win because central government can't focus on all of them.
This happened in Wuhan, with disastrous consequences. But the saving grace is when things no longer stay murky, that it has drawn the full attention of the central government, the center always win, often the opposition will just cease to exist. That has also happened in Wuhan/Hubei.
I don't disagree with your take. Xi isn't going to know everything that's going on.
It's just seems odd that it's a speech (and a relatively benign one from a layman's perspective) that set it all off. This was a world record setting IPO and I can't see China's leadership not knowing about it well in advance considering the international media attention it was getting far before it all blew up.
It just feels like there must be a lot more to the story.
Was Jack told he could have his IPO as long as he kept his mouth shut?
Was there something in the speech that directly contradicted what either Jack was told by leadership? Or what leadership had been telling the Chinese financial industry?
Same here. I don't agree with the parts I understand, especially when he veers off into an attack on Proposition 22, but I also don't really know enough about the larger subject to hold a qualified opinion one way or the other. Is the primary purpose of money to facilitate taxation? Beats the hell outta me.
It sounds like he's basically refuting the whole of Austrian economics. Is that a reasonable birds'-eye view of his position?
Summary of the article: It's totally unclear what happens but here is some speculation.
This is just like during the USSR. Sovietologists were reading and and over-interpreting the signals. Now Chinatologists create narratives that try to fill the holes of our knowledge.
Details of Chinese government decision making and internal power struggles are not available to the outsiders. Even the intelligence agencies have hard time figuring what happens. And Chinese like to deceive.
I'm a bit confused about this article because it first states that Xi personally halted the IPO and then says "It was unclear whether Xi or another government official was the first to suggest the IPO suspension".
The reality and its implications aside, I don't find this article very informative.
In this case rather than particular friends consider the general regulatory environment businesses operate in, with rules unenforced except for those that have attracted negative attention.
Do we know that's why they made the decision? The article makes the claim, but others claimed the updated regulation has been in the works for a while, and it was Ant trying to speed the IPO ahead of it.
Tightening financial regulation has been well known / speculated. ( Depending on how you view this ) Jack Ma isn't exactly Xi's Friend. Power Play. And Western Investors wants their money out before it is too late.
This is the future for the globe if China overtakes the US as the dominant power. This is why its so critical for the free world for the US to treat China as an opponent rather than a trading partner.
There's no way to run a business long-term in China without kissing CCP's ass.
I've been arguing for a while it is impossible for western companies to ever be successful (in the long run) in China, because eventually something happens that will pit the company against CCP. Make no mistake about it, CCP will win that battle.
If it's not some free speech battle (see NBA), then it's a Chinese competitor land grabbing your stuff with encouragement from CCP pushing you out.
Can’t say that for sure. Apple, AWS, Microsoft, Walmart, AT&T, GE, KFC, McDonalds, Starbucks, these all US businesses are wildly successful in China. Some of them are in China for 30+ years!.
Contrary to what most people I know think, I think Xi Jinping and company are really scared. And the more scared they are, the more authoritarian they become.
They are afraid of Taiwan because Taiwan is the living example that China can prosper without the CCP.
They are afraid of Hong Kong because it's an example of resistance to the regime.
They are afraid of religions because no matter how much you punish someone, you won't be able to make them worship you instead.
They are afraid of wealthy people because they can taste freedom and they can vision a China without the CCP.
If you compare this subthread to the much higher-quality—because more specific, and specifically about this story—comments elsewhere in the thread, you'll get a sense of why we have this rule.
No, I don't think Xi and his friends are scared at all. That's almost like saying the US government is keeping a dozen carriers because it's scared of Russia (or China).
Xi is rattling his saber against Taiwan because he can and he will face no consequences.
Xi is sending police to Hong Kong because he can and he will face no consequences.
Xi is clamping down on religion because he can and ...
Maybe Xi is a bit paranoid, but you don't become a lifelong dictator of a billion people by doubting yourself. If I have to guess, Xi is convinced that he's leading China into an age of unprecedented glory, and he's surrounded by people who talk the same and mostly think the same.
I'd love to have some sinophiles explain Xi's strategy, what motivated him and his cohort to accelerate their time line.
China has Hong Kong. Full assimilation, normalization would eventually happen. The local's were onboard and content. Why make a fuss now?
Taiwan also wanted full normalization, eventually. So much upside. Wait another generation and few people alive would even remember what the fuss was about. Call it reunification, cousins remarrying, federation, whatever.
China's subjugation of Tibet and the western provinces were fait accompli. The critics were completely impotent. Why prove them right, breath oxygen into their opposition?
Harassing foreigners, thereby pushing them out of the country.
My guess is Xi felt compelled to act aggressively now to head off upcoming crisises. Something the insiders see better than is yet publicly discernible. One or more things that will rock the legitimacy of the ruling party. (The upcoming demographic bust is even worse than expected. Public finances are terrible. To forestall any correction of official GDP measurements. Widespread accounting fraud and corruption. Environmental degradation leading to food shortages. Exodus of manufacturing to Vietnam, Malaysia, others is faster than admitted. Probably a dozen other credible threats.)
> I'd love to have some sinophiles explain Xi's strategy, what motivated him and his cohort to accelerate their time line.
The timer on him is still ticking. He himself may well secured an n-th term, and party's temporary obedience at gunpoint..., but I feel he is very desperate, and have sleepless nights in anticipation of 2022.
Any fault of him, whether it is flagging economy, or any concession on the foreign front, or him not scoring just enough of political capital on that, would be 1000% used to undermine his position by whomever wanting to unseat him.
Unlike the oligarchates of ex-Union, CPC has very real internal conflicts. CPC's size ensures that there will never be enough posts, titles, and entitlements for every member of the establishment.
Xi will never be safe from the party. The moment he runs out of steam, and presents a chance for power to be taken from him, someone, out of many millions of ranked party cadres, is just ought to take advantage of the situation.
Remember, both Kruszev, and Deng were relatively small fish at the time they seized power, as was the case for power takeovers in a lot of single party regimes.
The central weakness of closed, authoritarian regimes is poor signaling.
Kruszev and Deng wouldn't have been able to seize power without substantial supporter.
The way I see it, the failure of those in power (from their perspective) was of not recognizing that well of support as it built.
Or, put another way, this is why authoritarian regimes are always paranoid: they have no objective methods for gauging public / party / military support, as dissent is always private.
Maybe I'm missing something as my history isn't excellent. Didn't Stalin rule until his death? So in the context of this thread, yes, that strategy worked out exactly as Stalin wanted it to?
Older generation in Hongkong and Taiwan tend to identify themselves as Chinese, but the younger generation tend not to. This is mostly due to exposure to western media which rightly or wrongly accuses the authoritarian CCP government for every bad things happening within its border.
CCP leadership might still think they have a chance for true reunification, or maybe they're just saber rattling. Personally, I don't think full reunification is possible until Chinese propaganda is able to compete with American ones.
> Older generation in Hongkong and Taiwan tend to identify themselves as Chinese, but the younger generation tend not to.
I see this, but I also see the "We're [Taiwanese] the real China, and the mainland isn't" mentality as well (they'll get upset if you call them Taiwanese). It does get a bit complicated, especially if you think back to what happened during the cultural revolution and the people that stayed in mainland vs those that went to Taiwan.
Rarely will you run into anyone with this “we’re the real China,” 外省人 identity that would be offended to be called Taiwanese. Descendants of mainlanders that came to Taiwan after 1949 are a minority and Taiwanese identity is very popular here. Both Taiwanese and Waishengren will quickly point out that ROC is the original China and of course they are independent because how could they not be independent from a country that split from it. Then Taiwanese will disagree about whether China (ROC or PRC) has any right to colonize their island.
Another generation and hardly anyone will have Chinese identity, I imagine. An example I hear a lot is that the Vietnamese and Koreans also used to be Chinese.
It's interesting that you would characterize anyone who disagrees with your interpretation of Xi JinPing's geopolitical strategy as a "Sinophile." Understanding his motivations is more useful for his enemies than followers.
Xi acted aggressively against Hong Kong right now because he wasn’t expecting any pushback from the US. The UK tried, but the UK isn’t powerful enough on its own.
Look at how the US responded to Chinas aggressive actions against Hong Kong. They imposed sanctions which basically treated Hong Kong the way the US did the rest of China. The punishment is exactly what Xi wanted!
> I'd love to have some sinophiles explain Xi's strategy
I'm not a sinophile, but I have pro CCP friends (we get in a lot of arguments). I think the reason to support Xi is very simple. Look at Shanghai in 1990 and 2010[0] and GDP[1]. While many are still poor in China, it is nothing to what it was in the 80's and 90's. Many families went from living in impoverished conditions to being wealthy. Living conditions improved dramatically for the average Chinese person and cities appeared out of nowhere and many of them are quite successful. This is just fact. But when you look at it through this lens it is easy to understand why people support Xi. Their lives got better. Then think back to Mao, where no line couldn't be crossed if it was for "the greater good."
It is important to keep this in mind, because it is easy to ignore things like human rights violations, racism, colonialism. I mean the same thing happened in America. It is also easier to not compare things on a spectrum but discritized (e.g. you're either "racist" or "not racist" there is no more racist or less racist)[2]. So what do you see in China? Your country is booming. You see America talking shit. You see Americans revolting and complaining about their own government. You see George Floyd. But you don't see Xianjiang. You don't see Hong Kong the same way we see it in the west (it's just a few protestors). You see "We, the powerful China are trying to help our fellow Chinese people gain a better life" and the average mainlander doesn't understand "why they don't want our help" (something my Mandarin tutor said to me). They don't see HK as successful, they see it as falling behind the rest of China.
So my understanding is that it is more about that they fully trust their government. They have real evidence to point to too. The other issue is that the viewpoint is different as well. Uyghurs are seen as terrorists and the term "reeducation camp" is not synonymous with "concentration camp" for them. There's a high level of nationalism and sense of being a part of something bigger. You can also see this in how the history of China has been taught differently through history and how the definition of "Han" has changed (as well as what "China" is and called). The terms China and Han have become great unifiers for the country and people (there's something to say to creating less racial division points). It really comes down to perception and flow of information. And I'll be honest, seeing a lot of this makes me question a lot about the flow of information we have here in America.
To be honest, watching China (and America, Africa, Europe, Russia), I've come to believe that political support more comes down to human psychology and emotional appeal than it does to logic and morals. That might be why the current state of the economy is a good predictor of the next president (not 100% accurate, but pretty good). If you weren't doing well before and you are doing well now, well it must be the leaders, right?
[2] I'd say that this binary thing is an important aspect (one that has also become a problem in America). But like I have friends that say that America is hypocritical because it complains about censorship in China but not about it on Twitter. There's no nuance. There's no taking into account if an individual is expressing consistent ideology (complain about censorship in China and in the US) vs hypocritical (complain about censorship in China but not in the US, or vise versa). There's also some confusion that complaining is an essential part of democracy as criticizing your government in the west is seen as a way to improve and iterate as opposed to tearing it down.
The characterization of Hong Kong, Taiwan, Xinjiang and Tibet being content with Chinese Communist Party rule may be an exaggeration. Furthermore, Xi's hardline was a reaction to 1) rampant corruption of the communist party as a result of market liberalization. 2) democratic movements across the world, including the Arab Spring, the 2011 Chinese Jasmine Revolution, and the Umbrella movement.
Basically Xi's nightmare is the disintegration of the Soviet Union and he's running the opposite playbook that Gorbachev used.
I'm just a westerner reading reports from other westerners. I'm relating my perception, as gleaned from western media.
"The characterization of Hong Kong..."
IIRC, I read there's a huge swing in the self identification of HK residents from "Chinese" to "Cantonese". Slim evidence, I know. But maybe directionally correct?
"Xinjiang and Tibet..."
I didn't say that. Western media has related that ethnic Tibetans and traditional Muslims have struggled, since I began reading the news in high school (80s).
> Basically Xi's nightmare is the disintegration of the Soviet Union and he's running the opposite playbook that Gorbachev used.
This is certainly what it looked like from Russia in the 90s, when China was just starting to meaningfully rise. I think Gorbachev's main mistake was that people were given political/personal freedoms before economic ones, and it was done way too quickly. After some 70 years without these freedoms, people did not know what to do with them, so a lot of bad shit happened in late 80s and "wild 90s". Economy was decimated, Soviet Union collapsed, and Russia itself was close to falling apart as well. Just read any US geopolitics text from late 90s or early 00s - they all prognosticate that Russia will be no more, salivating to divvy up the spoils. What got in the way of that was Putin, or, to be exact, Russia's national security establishment which installed Putin, since nobody knew who he was 6 months before he became president.
So the way the Chinese policy was perceived from Russia, it was something more sane. For one thing their stated timeframe for the transformation of the country (50 years IIRC, but I might be wrong), seemed more realistic. For another they started introducing capitalism first, rather than give a bunch of dirt poor people completely unrestricted political freedom a-la early 90's Russia, which could only lead to anarchy and disaster.
And I do believe they will succeed in the long term. The best analogy I have is the current obsession in US corporations with quarterly results, leading to suboptimal long term outcomes. This is what the US itself behaves like, except the "quarter" is 4 years long.
China doesn't have to worry about that, they live on a different time scale and can enact consistent policies spanning many decades. This is both a blessing and a curse. It's easier for the US to course-correct, which can be beneficial because most long term plans do not survive contact with reality. But if China gets the big picture right (which to me it seems like they do), and is able to course correct on the margins, they don't really need the randomness that the US system has.
I just wish they'd knocked it off with the concentration camps and child labor at this point. It undermines their own progress.
As to Ma, oligarchs with political aspirations need to be periodically reminded who runs the country. This is why Khodorkovsky ended up in prison for a decade. He got way too powerful, exerted a lot of ifluence in Duma, and thought taxes were optional. None of those three things were acceptable to the Kremlin.
No, that's not why Khodorkovsky ended up in prison. He gave money to Putin's opposition, that's why. As to taxes, its laughable, the ruling mafia in Russia steals $trillions from the till and not even trying to hide it.
Re-read what I said. Dude bought half the Duma by the time Putin went after him and was writing his own laws. And you're right about taxes, but do observe that taxes are only optional in Russia as long as you are an oligarch who doesn't have political ambitions. If you delude yourself into believing you can buy the parliament, they become very non-optional indeed. Selective application of justice can be a powerful thing.
> Basically Xi's nightmare is the disintegration of the Soviet Union and he's running the opposite playbook that Gorbachev used.
I find it funny by how hard people of Western upbringing try find some "higher meaning" to what villainous characters do, the more powerful, and scarier they are.
And they do not want to take the most obvious, explainative, and floating on the surface explanation, because according to them, "it can't be that simple!"
A phrase I hear often is "I don't believe in cartoonish evil characters!!!"
And that despite much of 3rd world dictators very much being such, and their actions being very well explainable by "evil guys, doing evil deeds, because they are evil, arrogant f..ks," and that being their primary motivations, with all their "roleplay" obligations, and nominal official duties coming second to that.
There's quite a lot of evidence that the CCP values social stability (their own definition of it at least) extremely highly, above almost everything else.
I don't agree with you about Westerners not seeing the villainous wood for the evil trees, but I think it's moot when there's an even simpler explanation: they do not want to lose control.
That is it, but that does not preclude arrogance, and evil nature from being a primary driver of such person at the same time as rational desire for self preservation, and, sometimes, even a rare genuine brilliance in political matters.
It kind of does preclude it. Your argument seems to be "they do bad things primarily because they're just evil" and mine is "they do bad things primarily because they can't bear losing control".
I feel like you just want to make a point about the CCP being evil. Fair enough, but that doesn't really have any connection with what you were trying to say about Western critical thinking.
> Fair enough, but that doesn't really have any connection with what you were trying to say about Western critical thinking.
Western critical thinking seem to be hell-bent on thinking that some grand totalitarian regime cannot be just "dumb evil," and it must always come with some kind of equally grand conspiracy, secret agenda, maybe even some semi-valid point, as they probably think "it must take some brains, complex motive, and talent to run you evil empire at such scale."
It's beyond them to concede that their grand political theories are not the case, and the man is driven just by your regular arrogance, greed, and cowardice, aka lust for power, even if his ways of achieving those may be quite sophisticated at the time.
Even 3rd world dictators are only cartoonishly evil on a surface level. Gaddafi is a prime example. His "Amazon guard" sounds like it came straight out of a comic book. However, after a decade of civil war in Libya, it's clear that he was the only thing keeping it together in the first place.
Believe or not, CCP studied French Revolution and fall of Roma, and the boom and bust cycles in 2000+ Written Chinese history... And many stuff people should be studying... Nothing fancy, just learning from history.
Western people are not misunderstanding China, they just are content with a myopic tiny view, and happy to apply whatever judgement they can at the whim of the moment.
Discussing any China related issues on HN is like arguing with mobs. You either are drowning in downvotes, like saying Mr. Xi is not just a dictator; or arguing with someone who questioned any minor details you raised as a Chinese, often make me questioning did I lose touch with China so much that a random HN visitor actually knows better than myself...
> No, I don't think Xi and his friends are scared at all. That's almost like saying the US government is keeping a dozen carriers because it's scared of Russia (or China).
I'm sorry, but the US actually is scared of Russia and China and it's whole point in having a large Navy with carriers and such is to counter them. Those two countries are the only adversarial countries to have any meaningful naval presence, so there really wouldn't be any treason to maintain such a large carrier fleet unless they were scared of them.
No, we have carriers because they are costly. The point of the military-industrial complex, like any cancer, is to consume vast quantities. They admit to spending three times what China spends (the actual multiple is higher), and the last yearly increase was larger than Russia's total.
For some idiosyncratic definition of "work", one supposes. (Some would argue that at least the "agriculture complex" puts something approaching food on the shelves.) I live in a blood-red state, and I'm kind of an asshole so I have political conversations with everyone. I haven't this year talked to a single person who thinks that any of the wars fought in my lifetime were good wars to fight, or who "desire" any more of them. (There are some dead-enders who still defend the idea of Vietnam; before my time.)
The average citizen, however, may fall under your "accepts" criterion. It doesn't matter what nation I suggest, indeed I have made up nonexistent nations before, and most people will allow that, yes, given sufficient winding-up on the part of "news" organizations and politicians, they would accept bombing them to hell and back. In the long view of history, this will be why USA and Germany are discussed together in the same chapter. The public does not desire ruinous horrific ridiculous pointless endless war, but it does accept that, after enough gaslighting by MIC's paid employees in government and media. That's on us. I don't really like my team.
China (Russia can't even entertain the dream of it any more) doesn't have a dozen carriers, it's a totally different side of the geopolitical scales.
> Maybe Xi is a bit paranoid, but you don't become a lifelong dictator of a billion people by doubting yourself.
It's worth citing Nixon as an example of someone who while maybe not doubtful of themselves but was utterly paranoid and belligerent towards any and all dissent and opposition, but still made to the very top of the world.
While I strongly dislike authoritarian regimes and wish the CCP would just disappear. You have to admit that China in the last 20 years has been an absolute growth machine. I often see it argued that it's "fake" because the party subsidizes a lot of economic ventures, but even then they are building one hell of a domestic market.
Trying not to do the apology of a terrible regime, but I can see why Xi would see himself as "leading China into an age of unprecedented glory".
For what is worth many dicators had "golden" years. The issue is that at some point you get a bad dictator(or the current one turns bad) and you have to live with him your entire life. Not to mention that even within the golden period you still have freedoms taken away but that's a different story/trade off.
China isn't ultimately ruled by a dictator but by a party. You seem to think that the party would allow an incompetent person to assume the top position and stay there, which I don't see evidence for.
It looks like you don't understand how one party systems work. Just look at Trump and GOP and consider this is a democracy. Once he got the power the whole party(with few exceptions/undesirables that would be eliminated if it were a one party system) got behind him regardless if they liked him or his policies. There was bone to chew and they didn't want to loose it.
If things go south there are plenty to blame(i.e China, Russia, EU, rebels, etc). It is never the leader to blame. As the party leader controlls the police and the millitary there are really very few that would dare to consider a coup/leader change.
Even North Korea's Kim is "officially" supported by his party members but we already know what happens when they question him.
FWIW I really hope that you are right, a somewhat democratic and more collaborative China would be such a great partner to have, developing advanced tech and stimulating the fight against climate change.
China's political system is nothing that a good old style capitalistic bust can't take out in a decade or so. The USSR never recovered from the inflationary late 70s. Japan's state-induced credit boom economy never recovered from the early 90s deflationary bust. Dictatorships/state controlled economies are still economies.
As Hyman Minsky would agree - there's only one way to handle volatility, take it in your face. You can't suppress it.
>You have to admit that China in the last 20 years has been an absolute growth machine. I often see it argued that it's "fake" because the party subsidizes a lot of economic ventures, but even then they are building one hell of a domestic market.
It's not so much "they're pumping the numbers by cooking the books", it's more of the regime being at the right place at the right time. Other east asian countries industrialized at the same time without the CCP, for instance.
It’s a weak third world economy that is modernizing. Of course the growth is tremendous. The west (and Japan/Korea) went through this in the 19th and 20th centuries, this will happen all over the world this century across Africa and Asia. You can’t give too much credit for growth in comparison to the rest of the world when the backdrop is being behind. There are over a billion smart people to draw from, it’s just inevitable and draws from the strength of Chinese culture before mao suppressed it with the cultural revolution when schools were destroyed. This is in spite of the authoritarianism, and based on Hong Kong and Taiwan, would have happened decades ago without it
Not a lot of that could be credited to dictator for life Xi though.
In fact, by making himself basically dictator in life he has added the potential for tremendous instability in Chinese politics that did not exist before he took those actions.
Chinas growth is mostly due to the handiwork and frameworks set out by Deng Xiaoping. It’s easy to look successful coming in when the long-term investments his admin made starts to sprout.
You can use this logic with Stalin and Lenin, too. They went from a agrarian feudal society to a world superpower, helping defeat the Nazis and being the first in spaceflight.
Of course, you'd have to be wearing rose-colored glasses to take that portrayal at face value, and you'd also have to ignore significant atrocities the leaders were responsible for.
No, I don't think Xi and his friends are scared at all. That's almost like saying the US government is keeping a dozen carriers because it's scared of Russia (or China).
I agree that the US isn't scared of Russia or China, but I think the US is afraid of the idea of not having military dominance.
There is a long history of massive uprisings against the establishment in China. Tiananmen is just the most well known example of something that happens every year. I doubt Xi is ignorant enough to _not_ be afraid, though I agree with you that he probably is very confident as well.
> Xi is clamping down on religion because he can
My source may be dated, but as of 1988 policy making in China was a protracted, incremental process involving negotiation among numerous different groups (central and provincial governments, bureaus and departments)[0]. Things may be more centralized now, but I think it's safe to say that if something is happening in China, it's because multiple government entities at different levels have agreed to it. Who knows what the reason is.
a. There are not "massive uprisings" "every year" in China.
b. China has substantially centralized post-2000.
I would go so far as to say it is close-to-useless to cite a 1988 book on modern China unless to reference its history, that's how fast things have changed.
There are hundred of riots happening in China every year without even "China watcher" media telling a thing about them.
My own experience was seeing a huge commotion right in the city centre of Guangzhou, a megalopolis bigger than New York, without single mention in the media the next day besides some random youtube uploads.
I can co-sign that there are often incidents of civil unrest in China that are not reported in the media. However, from what i can gather, these are not explicitly anti-establishment. Most of them appear to be localized labor disputes or middle class NIMBYs making a fuss about development that inconveniences them.
For reporting on the former, you can check out China Labour Bulletin[0].
When I was there in 2014 there was a HUGE protest in Changsha. None of these are reported in the media inside or outside China.
I concede that my source on policy-making is dated, but I highly doubt the the functioning of a country as vast and complex as China can be completely transformed in forty years. Still, I'm not sure, so I emailed the author to verify.
I think there is a world of difference between protests (usually over eminent domain related concerns, not always) and an "uprising." I've tracked to track down some of these claims of 180,000 protests a year (following the links) and it's been hard - I find it hard to believe that these are very large protests.
I think you're caught in short term thinking. China's cultural character has been developing over 1000s of years. It's DNA hasn't changed meaningfully since 1988.
Sure, some of those values shine through, but I think you're underestimating how quickly change can occur and how values can be changed when your population scales up from 75 million (1000 years ago) to 1.3 billion.
The OP comment posits Xi acts based on fear. This comment posits he acts based on zero fear. No where do they posit a rational basis for action or a concrete analysis of power relationships.
> If I have to guess, Xi is convinced that he's leading China into an age of unprecedented glory, and he's surrounded by people who talk the same and mostly think the same.
For what it's worth given the ... disastrous state of the US, the deep rifts in the EU and the total retreat from anyone not China from Africa, that is a very valid, yet frightening, assessment of the future.
...that escalated quickly. Ant's business model is under the hood good old lending and banking, where their "innovation" excels at minimizing the barrier to spend your future money. This is not like Google or Microsoft, whose products are purely technology, this is a glorified financial company. And the more money they raise, the larger / crazier scale their lending will affect. Just to give you a hint, their "savings account" equivalent has way higher interest rate than the national banks, but with same level of account numbers if not more, that would need consistently piling money to sustain. Essentially they will become "too big to fail" if the IPO goes through, and you know how that went in 2008.
Yeah I guess Xi and co are scared, but for a different reason. Nothing about the foreign policies or whatever you think "freedom" is.
Ants lending business has doled out 1.8T on 36B of cash from Ant itself. That's 50 times the leverage they financed through ABS. A term that was very relevant in 2008.
Everything will be fine until the central bank raise interests, or if economy goes down the shitter. The new regulation limits the leverage cap from infinite to about 15, closer to bank's 10. This limits risk, and is considered a reasonable move.
A truly desperate move would be to allow these bubbles to go ahead and IPO. Which almost happened, everything will be fine and dandy for a while, until it's not. Whether it's due to Xi's insecurity or not, I'd say that China dodged a bullet here.
“Xi shows his power by punishing a powerful businessman” is a much better story for him than “Xi limits size of over leveraged company over fears it could wreck economy”
Exactly. This whole discussion about China suppressing Jack Ma is nonsense. It seems nobody here even knows what Ant was doing. And they’re all typically ignorant about whatever happens in China, and will just superimpose their biased views on them.
Ant was running some really shady and risky lending practices. They were not relevant when they were a private company, but once they became public, it instantly became a serious matter. The risk of failure is very high, and it risks bringing the whole system down.
What the government told Ant to do, was to have more collateral on their books. To increase it from 2% to 30%. Plain and simple. Then they can go forward with their IPO.
I think the reason your opinion is different than most people you know is because you really know nothing about china unfortunately.
> They are afraid of Taiwan because Taiwan is the living example that China can prosper without the CCP.
Not really, 20 years ago maybe? but now that the first tier provinces have mostly caught up economically it's really just a matter of time before rest of china catches up.
> They are afraid of Hong Kong because it's an example of resistance to the regime.
again, most chinese think the hongkong riots as a bunch of misguided youth manipulated by western media. you may not agree with it, but that's the view held in china right now.
> They are afraid of religions because no matter how much you punish someone, you won't be able to make them worship you instead.
or maybe the fact religion has been the main drivers for a whole bunch of wars?
> They are afraid of wealthy people because they can taste freedom and they can vision a China without the CCP.
is that why more and more wealthy chinese people are expressing their support for ccp abroad, but are instead labelled as brainwashed?
> Not really, 20 years ago maybe? but now that the first tier provinces have mostly caught up economically it's really just a matter of time before rest of china catches up.
This isn't even remotely true. Taiwan has a GDP per capita of $54,000.[1] The two wealthiest administrative division in China are Shanghai at $38,000 and Beijing at $37,000[2]. Moreover it's not an apples-to-apples comparison because those cities are consistently drawing the best and the brightest from the entire country.
> the first tier provinces have mostly caught up economically it's really just a matter of time before rest of china catches up
Prosperity doesn't have to be economically. It can simply mean financial and overall governing independence. OP's point is not that Taiwan is better than China, but to point out that Chinese people can do well without CCP and this is what CCP doesn't want people to know. Also Taiwanese economy has many sections from CCP so I'd imagine it'll do well above current standards without them
There is a very big difference between what the average person in China thinks and what the leaders of China think. A revolution doesn't need a majority to happen, just a single to low double digit percentage to happen. OP was talking about the leader of China, your post is talking about the populace of China.
> or maybe the fact religion has been the main drivers for a whole bunch of wars?
More likely that they consider religion a powerful fictional structure competing with their own fictional structure. No natural law dictates that either of them should dominate, so they chose to suppress the competition.
> Contrary to what most people I know think, I think Xi Jinping and company are really scared.
Contrary to what most people think, I think Xi Jinping and company are really scared, but not for the reason you mention.
Xi is said to be very afraid of Shanghai clique, and this is the reason they are still around, and not crushed like everybody else.
Who owns Ant? Speculations are that a number of people from the Shanghai clique are, with the biggest one being public knowledge: grandson of Jiang Zemin got Ant's shares for noticeably less than market price.
I believe, this explains why this case was handled remarkably tactfully, and why Ma still walks in one piece. Anybody else would've been disappeared the same day for much less in today's China.
I've heard it said they are afraid of religion, not because they want to be worshiped, but because it's scary to them for people to have a 'higher' authority than the state.
Exactly, centralized religion has historically been a source of power in competition to the government, military and so on. So authoritarian governments either try to co-opt it or get rid of it.
In the West, centralized religion historically was the government. They collected taxes, managed large scale projects, handing down justice, maintained postal networks, etc.
There's a reason that England's split from the Catholic church lead to a civil war and eventually the 1689 Bill of Rights: it was a coup.
Centralized religion has historically never existed or even anything close to it in China. And Xi has actually been a big booster for revival of the religious traditions that they do have.
Every one of these threads is full of people doing a ctrl-f find/replace Russia/China on their cold war propaganda lessons.
China's a different country, with a billion and a half people and a few thousand years of history that most Americans are completely ignorant of, but that doesn't stop them from being supremely confident in their takes.
And none of them are super-prevalent in China. They have a non-abrahamic tradition that's a weird localized mashup of buddhism, taoism, local city-gods and crazy statues.
This thread is full of people who've never seen any of it confidently asserting How China Feels About Religion.
The fastest growing community of Christians on the planet was in China for the last 20 years or so. China is large, so it's hard to argue how that equates to prevalence.
But in the next five years, the number of Chinese Christians is projected to grow to half the population of the entire United States—150 million. That may only be 15% of the population, but that's still significant.
It's hard to put the blame solely on Communist China when Christianity's main attempt to take hold led in the Eight-Nation alliance invading China and massacring Christians.
CCP-as-a-religion has definitely played a huge role in the stability of the Chinese regime, tremendously in the past and certainly a substantial amount in the present.
Wealth inequality is crazy in China (not as crazy as the States in terms of standard deviation, but crazy in terms of the scale: as of 2020 China has over 600 million poor with 140 USD monthly income[1] i.e. almost twice the population of the States)
Since I was young, my parents (both born and raised in mainland China in the 50~60s i.e. had experienced Mao before he died as well as the Cultural Revolution) would tell me that back in those days this whole communism bullshit managed to operate itself in such a large popullation because it was like the religion of the people. And properganda [2] is the way to reinforce that, in those time as well as in today.
You will immediately start seeing giant properganda billboards about how great Xi Jingping is when you visit countrysides in China. The poorer the places the more billboards there are, and the more worshipping you would see.
Even to these days you would find espeically among long-distance driviers little Mao Zedong ornaments in their cars as protective talismans because people (esp the older generation) actually thought of Mao as some kind of deity, one which they would seek blessings from. (It's often hard to tell if they are joking or they actually believe it. That's one aspect of this CCP-as-a-religion culture. And the true victims are the poor and uninformed.)
[2]: In tier 1 cities like Beijing and Shanghai, you would certainly find less properganda today simply because it doesn't really work against the well-educated. But dezinformatsiya is still rampant. If you can read Chinese, you would see that so many news articles people consumed on WeChat, Toutiao, Douyin, Baidu, etc, are just full of shit. Sometimes they are state-sponsored (showing false information about HK during the protests), and sometimes it's just sensationalism in its worst form (e.g. reporting on covid protests in the States and in EU with gifs that were not from those protest but somewhere else)
I think the difference between the U.S. and China is that in the U.S. corporate power controls the government, whereas in China the state has control over the corporations.
I don't think Xi is scared per se, but he definitely doesn't want China ending up like the U.S.
Do you think China suffers from a collective inferiority complex? By that I mean: Any attack or criticism is fiercely resisted because it challenges the party narrative that the party can do no wrong?
> Do you think China suffers from a collective inferiority complex?
Might have something to do with loss of face perhaps which is an important concept in many asian countries [0]. From my understanding you have to be very careful with criticism in many Asian countries, especially with regards to authority. If someone has higher authority than you (e.g. boss at work) he can generally do no wrong or if he does wrong in some way (e.g. makes bad business deal), you don't confront your boss.
I'm not a fan of cultural explanations for behavior versus realpolitik, especially when the alleged cultural characteristic can be distilled into a single phrase.
Couldn't it also be that criticisms are resisted because people literally remember the last 40 years of economic improvements in China, and attribute (whether reasonably or not) that improvement to the CCP? I'm not saying that's a good reason to fiercely resist criticism, but it's certainly an understandable emotional response.
> think China suffers from a collective inferiority complex?
You couldn't have said it better. But it's much more attributable to the now waning elites, than anybody else.
Those are people who grew up being spoon fed with success for life, and are envious beyond measure of people who got to succeed without paying a dime for party membership.
They are taught they are amazing with a long history (that they are trying to erase in real tie), but that is hard to reconcile how amazing they are with having sat out the scientific revolution the last 200 years or so.
They’ve managed to crush Hong Kong. And they are on their way to beating Taiwan at its own strengths.
Even if they are running scared, it looks like they’re running extremely successfully.
Of course, it helps that the only country that could have put pressure on them was led by a moron who though mispronouncing China’s name was the heights of showing them up, while not taking any effective long term actions.
It is the total opposite. Xi Jinping is keeping all the key holders to the kingdom satisfied impeccably well.
They aren't afraid of Hong Kong, the other perspective is that Hong Kong has much less relevance than it had during the handover, 20% of GDP down to 3% of GDP. Hong Kong is an example and cautionary of tale of "late stage capitalism" that all cities around the world experience, high rents and living costs and no consensus on how to help. Whereas mainland China gets large living spaces and welfare for all while inheriting exposure to high growth market based systems and its working extremely well right now, Beijing's state capital system is working. They can deal with Hong Kong as is for the next 17 years no problem.
Taiwan is just there. They can saber-rattle about that for a long time too.
The status-quo in China is good enough, some people get their money out, others provide services in mainland. That status quo involves the implicit threat of party members doing anything to you if you fall out of favor.
Chinese unity and territorial sovereignty is the primary common denominator of everything Xi does, if you do or say anything that can be seen to harm the state or the idea of China, then you've done it wrong.
I read the transcript of Jack Ma's speech, it wasn't very egregious, but all he had to do was skip the thoughts about the current state of how debt is negotiated in China.
If you can quarantine 1B people in two weeks, that means Xi's power has reached an unbelievable level. He can start a war if he wants to, no one in China can object to that.
Alibaba is nothing but a pawn to him. The fear created by halting of Ant IPO will ensure no other entrepreneurs will publicly challenge the authority as long as Xi is in power.
That Jack Ma said anything at all surprised me. Ma's had always been wholly obsequious, in public at least.
I guessed that Ma's spoke up for one of the reason's I've done so in the past: Ma was done and decided to stop playing. He felt he finally had enough juice to make some kind of a power play. He felt that Truth and Duty were principles worth dying for.
Whatever the reason, I'm sure he now wishes he hadn't.
I'll be doubly surprised if Ma doesn't have an exit strategy. Opting for that seaside villa and teaching poetry to local school kids.
Being able to finance high interest lending by selling subprime debt securities are principles worth dying for?
Or are these Truth and Duty? I'm very confused. Ma criticised the regulators for 'holding back innovation', innovation we've seen and paid for in 2008.
I am the last person to ask about the merits of Ma's argument. I'm firmly in the castles in the sky camp, that all finance is intrinsically suspect, and that all the belligerents retcon their dogma as needed (went up because I'm a genius, went down due to unforeseen circumstances completely beyond my control).
Like I tried to say, poorly, I'm just surprised Ma spoke up, and can only guess why.
This articles speaks of Xi Jinping as if he is taking all the decisions. There are a lot more people behind him that are assessing the situations based on merits rather than personal whims. It's only the Western ignorance that makes us see every economical, fiscal and foreign decision to belong to one man be it Putin or Xi Jinping. It also reinforces us the ideas that were sold to us by our own government: China is ruled by a dictatorship and everything they do must be wrong. Everything China does must be wrong because it's not a democracy and people are not free.
The internation banking rules force the banks to adhere to a set of conduct, regulations and rules that make the banking environment predictable for all actors. Looking at money flow: speed, volume and diversity, it is in China's interests to have a predictable and understandable banking landscape rather than continuing on this path of reinventing the wheel. The more Western banks trust the banking system within China, the more predictable and easy it will be to keep the economy growing. ANT's move is only establishing a state within a state and certainly hurts national security by creating a gap in one core service within any modern country: the financial system.
Actually I'm very doubtful that Winnie the Pooh thing was decided by him. Pretty sure that's just decided by lower level censors and Xi himself has no idea that the Pooh controversy even exists.
People have been saying the CCP is on its last legs for over 70 years.
In those seventy years it has led a country which grew to have the second largest GDP in the world.
-- writing this from the USA, where Covid is spiking, where there are armed right wing Covid open for business riots at statehouses, as well as against police kneeling on black men's throats killing them leading to nationwide blm antifa riots, where the president won't concede the election, where U3 unemployment is currently 6.9% etc.
(I heard about the Hong Kong riots in the US News until the open-business/blm/antifa riots happened with a much higher body count)
I believe that some systems are more moral than others.
That said, it's pretty clear from many comments on HN that people have no clue how far along China is, perhaps stuck in a early 2000s mindset. Nor do they seem to have any serious understanding of Chinese government.
I mean do you see China becoming the next world power? I do myself, though not nearly as long as a reign as America had, I foresee a 15 year thereabout hold from China until the country falls into the typical issues that the Western world has faced + Japan faced since the 90's.
> I mean do you see China becoming the next world power
I don't see there being a next clear world power because I don't think the world works that way anymore.. capital is way too trans-national at this point.
China is a split society. Many are still in poverty, per capita gdp is very low. However it’s a huge country and several hundred million now have western standard of living.
This is definitely true, although it is worth noting that many of those in rural poverty have also seen huge improvements to their condition (number making under $2 PPP/hr has gone from 700 million to 2 million in a matter of 2 decades) and many of the cities in traditionally rural provinces are booming.
I am usually fairly relativistic on moral questions but, it's too long to really do it in a comment, but I think you can devise a good (ex vacuo) argument for - in short - the good parts of what we in the west would characterize western ideals to be.
I feel the same way when Peterson-types try to say it's impossible for atheistic ethics to "exist" logically, the argument is again just too long to do justice outside a monograph.
Civics classes are not the intellectual battlegrounds of the past or future.
Whether those ideals are destined to prevail is not really a scientific question.
This is also true of the far left in the US. Their attempts to increasingly censor, deplatform, ban, cancel, and so forth suggests that they are scared that people do not think like they do. And with that comes a bend towards authoritarianism and fascist control, the very things they claim to be against.
But just like with the chicken and the egg, I cannot rightly tell if either the CCP or the American far left are acting out of fear, or if they are just exercising newly-gained power. It may simply be that they're putting new power to work, testing the waters to entrench their positions further.
>They are afraid of Taiwan because Taiwan is the living example that China can prosper without the CCP.
You can not compare the racially and culturally homogeneous Taiwan to the whole of China. A country like China has 0 chance of remain whole without authoritarian leadership.
>They are afraid of Hong Kong because it's an example of resistance to the regime.
They are not, they crapped their pants and with time things will get worse for them.
>They are afraid of religions because no matter how much you punish someone, you won't be able to make them worship you instead.
They just don't want the west of China to become a playground for Islamic terrorists.
Because given the regulation has been in the works and they knew it, they probably would have to have state this precise risk in their IPO documents for fear of being sued and big investors might have balked?
Just a couple of weeks ago people were worrying about Ant being a "national security threat", and you ask why they'd rather IPO in Shanghai than in a country that sees them as a threat?
I thought Jack Ma was smarter than this. He stepped down as Chairman of Alibaba precisely to avoid running afoul of the party. Yet he then disparages the party ahead of Ant’s IPO? Wondering how long until Ma is charged with fraudulent behavior and subsequent arrest.
Been wondering if "free market economy" still works the way we expect when other nations might not share the same core principles in governance ... checks & balances ... etc
"Free market" just means that the prices are determined by the market, not by government-sponsored monopolies, artificial scarcity, regulation, tariffs, restricted information flows between buyer and seller, etc. It is in contrast to England pre-1700-ish where various groups had a monopoly ("patent") to sell goods, also government-imposed tariffs on some goods.
Free market does not mean that the players within the market have liberty other than the price to buy or sell at. So a truly free market under a dictatorship should still act the same way, it's just that dictators have a way of not liking free markets.
I was thinking about China but it can be applied to anyone. Free market without every one following exactly the same rules is not free market, or at least is not what I understand as free market.
We've never had 'exact same set of rules'. Leave dictatorships aside and just tell me what is 'free market' suppose to do when two legitinate democratic authorities have different rules?
In EU we don't grant software patents, and don't have the patent trols problem, we have different consumer righs, no mandatory arbitration, etc. In germany they have roads without speed limits, etc. A product destines for success in EU might fail in US and vice versa.
You're right, but the EU is not that different from the US. In general terms we could say we're playing by the same rules.
And there are no special rules for Europeans and other for foreigners. If you try to run a business in, lets say, Germany. You have the same rules and the same obligations as any other German. That doesn't happen in China.
The free market economy doesn't exist. It's a fairy tale told by the news industry to the uneducated masses. Whenever you hear the news say the US has always been a champion of free trade, just know they are lying.
There is no such thing as "free market economy". Every economy is a protected economy. It's just a matter of degree. Go ask huwaei, iran, venezuela, zimbabwe, cuba, etc about "free market economy".
All markets are manipulated and controlled nationally/geopolitically. The price of oil isn't determined just by the "market", it's decided by the FED, subsidies, war, etc.
The only core principle shared by all nations is to lie, cheat and steal as much as possible. And things ultimately work out. The idea of governance, checks and balance, rule of law, etc are just frivilous distractions. Not to mention propaganda like "democracy" or "western values". Surely saudi arabia is a shining symbol of democracy and western "values".
That depends on whether you believe free market implies a slightly-but-not-quite tautology definition (the market is whatever the market is the market etc.) or in a more Friedmanite-sense ("Capitalism is a prerequisite but not a guarantee for freedom")
Who would've thought Communists would've made the best capitalists? China is a "managed economy" and about as far from "free market" as North Korea[1]. Does it work the same way? I don't think so. We know that corruption and graft have become the norm in China[0], not the exception, so I would contend it works nothing like a free market economy.
There is no country that doesn't have a managed economy. Trade deals, subsidies, gov sponsoships, immigration restrictions, etc. All these are form of economy management to protect the tax sources and (try) to balance the out/in cash flow.
In an ideal world they would not be needed but in todays day and age when countries are not developed equally they are necesary to protect your tax sources and keep the cash flow in the internal economy instead of it being sent somewhere else.
> There is no country that doesn't have a managed economy.
True, but there's "more managed" and "less managed", and the difference matters. It matters to your ability to make money, and it matters to the economy's ability to actually produce what people want.
Free market economy works to the extent it is free. The benefits of the market economy are somewhat exponentially proportional to how free that is.
India is far from a free market economy. However some modest reforms in 1990s have given 100s of millions a hope that they can reliably have 3 meals a day and a roof over their head even with almost no skills.
This deleted $150 billion off of Ant's valuation. Yet the bigger news in China tech this week was the new proposed Anti-monopoly rules that wiped $280 billion off the market. [1]
The reuters article [0] offers more details on this. Perhaps these speech was a catalyst for this action, but scrutiny of the organization seems to be something that has long been in the agenda of the Chinese government.
This always happens in China when billionaire's there "overstep their bounds" and criticize the party. I wouldn't want to be Jack Ma right now. This may not end well for him. Those billions are his only as long as Xi wants him to have them.
* The clamp down on fintech has been on the agenda for a long time. Rooted in lessons learned from western crisis, the most recently, 2008 financial crash. The P2P disaster happened since 2018 [1]. The short boom and bust cycles in Chinese stock market [2].
* Totalitarian government controls all major aspects of economy is by design its right and purpose.
* Jack Ma made the speech not because he is sure of Ant IPO, but because he was angry that the IPO is bound to fail one way or another. So he was pissed off and made a rant speech. Listen the speech yourself, he is making grandiose claims, but meanwhile his version of innovation is nothing but copying the risky financial schemes that already caused disaster before. That's a true rant, the quality of thoughts is the lowest among all of Jack Ma's speeches which are already quite low when comparing him to others with similar status.
* Ant financial indicates a strong collusion between Jack Ma and Ant and some powerful people in CCP & government. Ant IPO price is 68.8, the stock serial number is 688688. In Chinese, 6 is pronounced same as 顺 (meaning everything goes according to one's own wish), 8 is same as 发 (in Cantonese, meaning getting rich). This means that Ant was getting preferential treatment that is way beyond normal expectation.
* Among many stakeholders of Ant, one can easily found many brokers of powerful hidden figures in CCP. For example, Zhao Wei's mother. Zhao Wei, who were barred from stock market because of previous misconduct [4,5], whose husband Huang Youlong was a driver of the corrupted CCP member Xu Zhongheng. Zhao Wei and Huang Youlong married shortly after Xu Zhongheng were prosecuted [6]. It was widely rumored that Zhao Wei was Xu's mistress, and Zhao Wei and Huang Youlong ensnared or inherent Xu Zhongheng's embezzled fortune.
off topic but 6 does not pronounce the same as 顺，it pronounce the same as 溜，which has the same meaning. '6' became popular from the phrase '666', which originated from E-Sports to compliment someone who made a good move.
Thanks for the summary and sources. Here's my question...the IPO is halted - but Ant still runs, right? How does halting the IPO reduce any risk in the financial industry for China? If Ant is still operating and giving leveraged loans...isn't the risk still there?
And if CCP is reducing the ratio (which should happen whether Ant is public or private)...why couldn't they just reduce the ratio & allow for the IPO?
"free and fair" is a very vague description depending on your economic and political leanings. You could argue the U.S. is not one, nor has one ever truly existed.
Is it free and fair to regulate the financial industry? Depends if you're working in the industry or not
> Hmm... Maybe something that happened this year which hasn't really affected China much in the last couple of months that seems to somehow be messing up the whole rest of the world perhaps?
Are you insinuating that the coronovirus was spread deliberately?
Yeah, there's a mountain of evidence to suggest that, especially since China is now totally unaffected by Coronavirus (no masks, lockdowns, nothing), and the history of advocating use of biological superweapons by Chinese military strategists going back 20 years, and the long history of Zhengli Shi publicizing how proud she was of doing gain of function research on SARS, but that would be a very long copypasta.
I'm assuming by "this" you mean "Ant's IPO gets shut down because of Ma's comments". This "rule by law", which is different. In rule of law, the king is bound by the law. In rule by law, the king decides which law you broke and prosecutes you for it.
> The ‘rule of law’ … refers to a principle of governance in which all persons, institutions and entities, public and private … are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated
> Now, I am not saying that the US or the EU are exemplars of it.
Although some in the US clearly don't like it, even the most major transgressions from that principle in the west are fairly minor - the rule of law prevails.
Bankers never gave triple A ratings to shitty securities, the ratings agencies did. Crucially, ratings agencies aren't banks and the people who work their aren't bankers.
But you are correct that the ratings agencies were quite negligent.
As the son of a Marxist I'm not blinkered, but I still don't think I've ever heard a specific hit-list of who should've actually been prosecuted? The problem seems more structural than a casual description can convey?
Best I can tell Madoff was unrelated to the actual subprime mortgage crisis.
While I agree that there were structural problems, we can't just allow diffusion of responsibility[0] to escalate to the point that you can commit manslaughter and get away with it. (737 Max says hi) Especially since you can purposefully organise a company to maximise confusion as to who, if anyone, was responsible.
As for "a specific hit-list" - it's not gonna appear by itself, the rating agencies are a good place to start, but you have to actually investigate and subponea documents. As far as I can tell, that work has not been done with anything like the vigour and resources it deserved - we just found a couple low-level scapegoats and called it a day.[1]
Afaik, the Chinese government is worried because of the size of the debt managed by Ant (45 billion) in comparison to their own capital (450 million, 1%). The whole risk is offloaded to good old banks which are then exposed to an excessive risk. The government is planning to change the law to set a minimum threshold of 30% of capital over managed debt, and this is the reason the IPO was withdrawn: the law is about to be made much more stringent and this changes the valuation of the company entirely.
This aligns with what I've heard, and it's not surprising for Chinese govt to let an industry grow by itself then suddenly put a hard brake on it by imposing a set rules with its heavy hands. The difference is this time the victim is much larger and visible than anyone in the past. This mode of operation was not started by Xi, but no doubt Xi's gov't made it less transparent and more brutal to the business and investors.
#/media/File:1_AD_to_2008_AD_trends_in_%_GDP_contribution_by_major_economies_of_the_world.png){kind=link}
While we should take the WSJ's preliminary reporting with a grain of salt, the Ant IPO halt was shortly followed by the announcement that Beijing was going to be looking at antitrust and monopolistic behavior by big tech. [0] The 'angered Xi and the old guard' narrative seems very plausible.
Also, if anyone's interested, here's a translation [1] of the speech Jack Ma gave that set off the commotion. Interesting bits about what he thinks of incumbent financial powers (or at least, what he says to that audience). It's also interesting to see what relatively mild comments could trigger this kind of reaction when power is so centralized.
[0] - https://www.bloomberg.com/opinion/articles/2020-11-11/china-...
[1] - https://interconnected.blog/jack-ma-bund-finance-summit-spee...