World’s largest IPO halted by China due to monopolistic practices

Japhy Barrera, is a member of the YCL’s Birmingham branch

China intensified its regulatory campaign last week after an investigation into Jack Ma’s Alibaba group concluded that the conglomerate had been utilizing “monopolistic practices”.

The Communist Party of China intervened to halt the Alibaba subsidiary ‘Ant Group’ from going public due to such malpractice. The company’s Initial Public Offering would have been over $34 billion, making it the world’s biggest.

Ma, whose net worth dropped $10 billion (to $49 billion[1]) due to the crackdown, made inflammatory remarks back in October that the CPC had a “pawnshop” mentality. The material reality differs, however, as China’s economy continues to grow as other, predominantly neoliberal economies have stagnated and declined.

This instance is by no means isolated; the CPC Central Committee pushed new guidelines in September that expanded state control over the entirety of the private sector.

China utilizes the private sector and foreign capital and regulates it to gear toward public benefit. This sharply contrasts the world-encompassing neoliberalism, which is letting corporations run amok with little to no accountability.

Because of its mixed and transitional economy, many confuse China to be a capitalist country; far from it, they are trailblazing the route for 21st-century socialism and posing as the most considerable counterweight to capitalist hegemony since the Soviet Union.

China’s public sector is evergrowing and includes the most essential and predominant of services that unwaveringly intend to serve the public need. On top of this, almost every private enterprise has a CPC branch which tailors corporations away from the “profits-only” mindset that we see in the west, prompting some to suggest that there is no truly private enterprise in the country at all.

This was made more widely apparent when Donald Trump’s tax returns were released, exposing that he had been paying nearly nothing to the U.S. government. Upon closer inspection people realized that Trump had actually paid much more in the People’s Republic of China, shelling out hundreds of thousands over the past several years[2].

This juxtaposition highlights the different attitude toward capitalists and the regulation of them that China takes, as well as the effectiveness of such regulation. The CPC continues to rein in corporate interests which seek to elude and undermine their campaign for social progress. Money pours into the country from companies worldwide who can’t resist what is now the 2nd biggest economy in the world.

Sources

[1] https://www.bloomberg.com/billionaires/[2] https://www.nytimes.com/2020/10/20/us/trump-taxes-china.html

Japhy Barrera

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