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Data: Yahoo Finance; Chart: Axios Visuals

China's suspension of Ant Group’s $35 billion IPO is "just the beginning of a renewed campaign by China to rein in the fintech empire controlled by Jack Ma," Bloomberg reported Tuesday.

Details: "Authorities are now setting their sights on Ant’s biggest source of revenue: its credit platforms that funnel loans from banks and other financial institutions to millions of consumers across China," the article noted, citing unnamed sources.

Why it matters: Ant Group's IPO wasn't just set to be the biggest of all time, it was meant to serve as a tentpole of China's growing influence in the global financial sphere.

  • As Axios' Felix Salmon notes: "Ant provides the technology that powers much of the Chinese economy, from borrowing to saving to investments to insurance. A failure of its systems could have devastating consequences for hundreds of millions of people."

What's next: Bloomberg also reports that the China Banking and Insurance Regulatory Commission "plans to discourage lenders from using Ant’s platforms and has already asked some to ensure their portfolios are compliant with stringent draft regulations announced on Monday."

  • The proposed measures call for platform operators to provide at least 30% of the funding for loans. That would render many of Ant’s existing transactions noncompliant, as the company currently keeps only about 2% of loans on its own balance sheet. The rest of the loans are funded by third parties or packaged as securities and sold.

Be smart: All this could probably have been avoided had Ma not railed against financial regulators, said that financial regulation was outdated, and claimed technology companies should not be subject to regulation in recent remarks.

  • The suspension of the IPO puts into limbo bids of nearly $3 trillion from retail investors in China, who play a much bigger role in financial markets than their U.S. counterparts, and a $400 million expected payday for the banks assisting with the listing.
  • The suspension also gut-punched shares of Ant Group's parent company, Alibaba, which will keep an ownership stake of one-third of Ant after the IPO, and Chinese tech companies broadly.

Go deeper

The U.S.-China split in space

Illustration: Aïda Amer/Axios

China and the U.S. don't collaborate in space —a decades-old divide that is shaping the future of both nations' space programs.

Why it matters: U.S. semiconductor companies and those in other sectors are under pressure — from politicians and consumers — to become less reliant on China. The record of the nations' parallel ambitions in space shows what the U.S. gains and loses when it cuts China off.

Nov 17, 2020 - World

Scoop: State Department to release Kennan-style paper on China

Illustration: Sarah Grillo/Axios

The U.S. State Department's Office of Policy Planning is set to release a blueprint for America’s response to China’s rise as an authoritarian superpower, Axios has learned.

Why it matters: The lengthy document calls for strong alliances and rejuvenation of constitutional democracy. Axios obtained a copy.

Updated 13 mins ago - Politics & Policy

Sen. Kelly Loeffler to return to campaign trail after 2nd negative test

Sen. Kelly Loeffler addresses supporters during a rally on Thursday. Photo: Jessica McGowan/Getty Images

Sen. Kelly Loeffler's (R-Ga.) campaign announced Monday that she "looks forward to getting back out on the campaign trail" after testing negative for COVID-19 for a second time, following earlier conflicting results.

Why it matters: Loeffler has been campaigning at events ahead of a Jan. 5 runoff in elections that'll decide which party holds the Senate majority. Vice President Mike Pence was with her on Friday.