Ant Group enters into strategic partnership with eastern China’s Hangzhou, signaling the fintech giant’s positive outlook

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 getting the company’s popular electronic payment platform Alipay and online lender MYBank to play a greater role in Internet-based inclusive economy, especially for the city’s small and medium-sized businesses.

In addition, Ant Group is expected to help Hangzhou host major international events, including Asian Games in 2023 from September 23 to October 8 and a “global digital trade fair”, Liu said. He became party chief in Hangzhou at the end of 2021, and replaced 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.

The thaw in regulatory scrutiny comes years after China’s regulators prevented Ant Group’s share sale for USD 37 billion in 2020when they halted the Nov. 5 debut of the company’s shares at Shanghai and Hong Kong exchanges, less than 48 hours before the highly anticipated start of trading. 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.

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 Industrial and Commercial Bank of China vice president Li Yunze was appointed last week to heads the new National Financial Regulatory Administration (NFRA).

The yet-to-be-launched NFRA will incorporate the China Banking and Insurance Regulatory Commission and absorb the central bank’s financial holding company oversight body and the securities regulator’s investor protection function, according to a draft plan submitted to National People’s Congress – China’s top lawmaker – earlier this year.