On October 24, 2020, Jack Ma's high-profile outburst at the Shanghai Bund Finance Summit caught many in China by surprise. During his 21-minute speech, the Chinese e-commerce and financial-technology (fintech) giant lambasted the international Basel Committee on Bank Supervision for becoming an "old men's club".
He also mocked Chinese banks for functioning like "pawn shops" and for continuing the "outdated" securities-based lending practice.
Then on November 3, both the Shanghai and Hong Kong Stock Exchanges announced they are suspending the initial public offering (IPO) of the Ant Group, the financial arm of Jack Ma's e-commerce empire.
Many Chinese speculated that the sudden halt of the would-be world's largest IPO, two days before its planned launch, was triggered by Jack Ma's outspoken criticism. Yet the official issuing, around the same time, of the "Interim Measures for the Administration of Online Small Loan Business (Draft for Comments)" changed the public opinion.
Jack Ma and his Ant Group's spectacle have since remained at the centre of public attention.
A predominant view expressed in the millions of commentaries and discussions on the Baidu search engine and other popular Chinese video-sharing websites holds that Jack Ma must have been consulted by Chinese regulators about the draft rules for online microloans before their release; and this resulted in his "outdated supervision" criticism.
In other words, he made the "old men's club" comment because he already had detailed information on the instructional power of the Basel Accords on China's micro-financial regulatory development.
His "pawn shops" criticism is widely believed to have been sparked by his advance knowledge of the forthcoming interim rules by which his Ant Group had to increase its capital contribution to its microloans from 2 per cent to 30 per cent.
This higher threshold would surely curtail his company's ability to fund quick microloans by packaging and selling them at will as securities, often at a leverage ratio of 100 times of its total assets.
Public pondering as such has provoked broad disappointment in Jack Ma. Many Chinese lambast him for arrogantly thinking that he and his business are entitled to be exempt from compliance costs and regulatory restrictions.
They also rebuke him for selfishly putting his own commercial interest above the safety and stability of the entire financial sector.
They are particularly disturbed by the thought that having been consulted about the draft rules, Jack Ma had "insider knowledge" of both the proposed regulatory measures and their planned release date of November 2; and he thus decided and tried hard to launch his Ant Group's world's largest IPO in Shanghai and Hong Kong on November 5. Had his push for the Ant's dual listing prevailed, his group of major stakeholders and he would have harvested more than US$30 billion ($42.7b).
Yet the interim rules and regulations, once put into execution, should directly impact the Ant Group's operations, which could shake the market confidence in the company and send its stock price plummeting.
The public almost unanimously believes that when that happened, ordinary investors, not the Ant Group, had to swallow the market loss, and financial regulators, not Jack Ma, had to shoulder the blame for the crash.
Many Chinese have listed on the Baidu search engine their positive reactions towards the interim regulatory measures for microlenders and their mobile banking business.
However, they also publicly express anxieties over whether and how the "visible" government and "invisible" market hands may complement each other in dealing with Ant-scale fintech firms.
There is an obvious concern regarding the fact that such companies are usually licenced to conduct the business of banking, payment processing, micro-lending, fund establishment and selling, futures trading, and insurance brokerage. Their cross-sectoral hybrid operations have enabled them to rapidly grow into "systemically important", or "too big to fail", financial institutions, irrespective of the market's judgements or valuations.
Many Chinese further believe that the Ant Group may prove even more challenging for both the "visible" and "invisible" hands. For the company, through tapping into the e-commerce ecosystem of Jack Ma's Alibaba Group and Alipay's huge digital transaction portals, has not only grown into the biggest "Ant" on earth, but has also got its legs into virtually all corners of Chinese society and all aspects of everyday life, both online and offline.
Simply put, the Ant's digital products have been used by, among others, hundreds of millions of individual Chinese, financial institutions, commercial enterprises, and government agencies at all levels.
Its online payment and service platforms have meanwhile established voluminous pools of data of customers' behavioural preferences, identity traits, social relationships, payment histories, performances of contractual obligations, just to name a few.
Furthermore, Jack Ma has never appeared hesitant in disclosing the Ant's shareholders list made up of well-known, wealthy, active, and influential individuals and organisations. The Alibaba Group, which the Ant Group was spun out of, is, at the same time, a publicly known controlling shareholder of dozens of prominent media groups.
It is not difficult for the average Chinese to imagine that all this gives Jack Ma's e-commerce and internet finance empire an incalculable competitive power and advantage for market shares. They are not surprised, either, to learn that the Alibaba e-commerce complex has been routinely using technical measures and contractual arrangements to impose the "choose one out of two" requirement on its commercial clients.
Under this requirement, merchants and businesses seeking to open shops on its online platforms are obliged to specify whether they would trade with only the Alibaba group, or with others.
Similarly, it is almost within the average Chinese' expectations that the Ant Group has repeatedly either elbowed out its "too-small-to be-counted" digital lending competitors with its much more advantageous fintech platforms, or swallowed them up by having a much deeper pocket.
Yet many Chinese are shocked to learn that had the Ant Group succeeded in launching its IPO, it would have instantaneously accounted for 40 per cent of the total market capitalisation of the Sci-Tech Innovation Board of the Shanghai Stock Exchange, where it was intended to be listed.
What strikes fear into them is the thought that should that have happened, a "sneeze" of the Ant might shake the entire stock market.
While no conclusive opinions have emerged from the public deliberation on the adequacy of the interim regulatory rules, there are ever louder public appeals to Jack Ma to take a leading role among China's fintech giants in working with regulatory agencies to reinvent a more socially responsible microcredit industry.
• Xin Chen is a research fellow, NZ Asia Institute, at University of Auckland, and Xingang Wang is a PTE fellow, Economics Department, at University of Auckland.