Ant Group enters into strategic partnership with eastern China’s Hangzhou, signaling the fintech giant’s positive outlook
Ant Group and the municipal government of Hangzhou, capital of eastern Zhejiang province, have entered into a comprehensive partnership that is expected to speed up the city’s digital transformation as the financial technology company of Alibaba Group Holding nears completion of its long-running restructuring. process.
As speculation swirls about the potential amount of the fine that Beijing may impose on Ant Group after its two-year “business establishment”, the fintech giant asserted its positive outlook at Tuesday’s signing of an agreement with Hangzhou for a “comprehensive deeper strategic cooperation”.
Ant Group Chairman and CEO Eric Jing Xiandong said during the signing ceremony that the company “now stands at a new starting point,” according to a joint statement released by the company and the Hangzhou Municipal Government.
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The company will invest in artificial intelligence, blockchain and database technologies in Hangzhou under the pact, Jing said. In addition, the firm expects to help develop the city into China’s premier showcase for digital economy, technology innovation and talent, and the universal benefits delivered by broad technological application.
A bird’s eye view of the central business district of Hangzhou, the capital of eastern Zhejiang province. Photo: Shutterstock alt=A bird’s eye view of the central business district of Hangzhou, the capital of eastern Zhejiang province. Photo: Shutterstock>
Hangzhou Communist Party Secretary Liu Jie credited the two sides’ symbiotic relationship during the ceremony, pointing out that Ant Group has grown big because of the city and that the city has “become brilliant” because of the company, according to the joint statement.
Hangzhou, Liu indicated, “will always be the home port for Ant Group to fly high and venture far”. He said the city’s leadership will establish a “normalized mechanism” to help promote Ant’s development.
Liu, who had visited Ant Group’s headquarters in January, said he expected the company and Hangzhou to collaborate on various digital transformation initiatives. These include making the company’s popular electronic payment platform Alipay and online lender MYBank play a bigger role in internet-based inclusive finance, especially for the city’s small and medium-sized businesses.
In addition, Ant Group is expected to help Hangzhou host major international events, including the 2023 Asian Games from September 23 to October 8 and a “global digital trade fair”, Liu said. He became party chief in Hangzhou in late 2021, replacing Zhou Jiangyong who pleaded guilty in April to embezzling more than 193 million yuan (US$28 million) in a landmark Chinese anti-corruption case.
Ant Group’s pact with Hangzhou reflects the company’s newfound confidence in playing a role in boosting the country’s economy, following Beijing’s move to ease curbs on China’s big tech companies.
In January, Ant Group took a decisive step towards putting its long-awaited IPO back on track with its share structure overhaul, which diluted the voting power of founder Jack Ma to make the company more transparent and diversified.
It followed the government’s pledge of much-needed policy aid to the country’s big tech firms to help bolster the country’s economic recovery efforts, which emerged at the conclusion of the key economic work conference in Beijing in December.
The thaw in regulatory scrutiny comes years after China’s regulators blocked Ant Group’s $37 billion share sale in 2020, halting the Nov. 5 debut of the company’s shares on the Shanghai and Hong Kong exchanges, less than 48 hours before the highly anticipated start of trade. That debacle also followed a controversial speech Ma gave on financial regulation in China.
A large part of Ant Group’s rectification process is that the company must follow the same regulatory rules as traditional banks when it comes to offering credit services, a requirement that can reduce profitability.
The fintech giant’s net profit in the September quarter last year fell 83 percent from the same period in 2021, according to Alibaba financial reports, which revealed the e-commerce group’s share of dividends from Ant Group.
Alibaba, owner of the South China Morning Post, and Hangzhou had previously entered into a strategic partnership in January.
Meanwhile, Ant Group’s push for restructuring comes to the finish line as China continues its sweeping overhaul of the country’s financial regulatory system. Former vice president of the Industrial and Commercial Bank of China, Li Yunze, was last week appointed to lead the new National Financial Regulatory Administration (NFRA).
The yet-to-be-launched NFRA would incorporate the China Banking and Insurance Regulatory Commission and absorb the central bank’s supervisory body for financial holding companies and the securities regulator’s investor protection function, according to a draft plan submitted to the National People’s Congress – China’s top legislature – earlier this year.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit SCMP’s Facebook and Twitter sides. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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