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If a financial institution operates like a bank but creates more risk than a bank, shouldn't it be regulated like a bank?
Jack Ma said banks should ditch the "pawnshop" mindset and switch to a credit-based loan service, because his Ant's micro/small loan service is completely backed by credit rather than something risk-proof properties like a house. Ant not only acts like a bank, but also is the largest credit buerau in China. It provides loan based on the credit score it rates on its customers.
This article also fails to mention the Basel Accords that Jack Ma criticized. After the 2008 financial crisis, Basel III includes regulations on "shadow banks" like Ant in addition to traditional banks. Is it possible for a bank that has only assets of 3B lends out 300B[1]? No, banks are prohibited due to regulations. But, Ant already did. They created an Asset-Backed Security (ABS) via a process called securitization. It is unprecedented that a financial institution with such big financial leverage and a large amount loan going unregulated.
A pawnshop is at least backed by real properties like houses. What back the risk Ant create? Consumers' credit?
If I still cannot make you understand, please google "2008 MBS ABS". You'd be surprised at the similarity of what Ant's been doing and what caused the financial crisis.
I sincerely hope hacker news readers take a look into the underlying financial bubble rather than "Chinese government reaps tech innovator" to which this article tries to mislead you.
[1]
https://translate.google.com/translate?hl=en&sl=zh-CN&u=http...
The real question people are asking is why now? Didn't the regulators have enough time to assess the irregularities earlier? A $30 billion IPO plan couldn't have been made public without the regulators giving at least some in-principle approval, and I'm sure Jack Ma knows how to navigate the bureaucracy/politics in China before he would make such plans public. I don't understand Chinese politics much but this just reeks of vendetta.
>After the 2008 financial crisis, Basel III includes regulations on "shadow banks" like Ant in addition to traditional banks. Is it possible for a bank that has only assets of 3B lends out 300B? But, Ant already did. They created an Asset-Backed Security (ABS) via a process called securitization. It is unprecedented that a financial institution with such big financial leverage and a large amount loan going unregulated.
If that's the case, why were they being allowed to continue as a privately-owned lender for so long?
> The real question people are asking is why now?
That is a very good question, from public information I can gather around Ant and Ma's career in general, it seems he has strong backings from a wide range of powerful people due to financial relations as well as his reputation -- he is the Elon Musk of China and commands tremendous respect and pride among not just citizens but also top leadership.
In fact, his backing is so strong that China's banking and financial regulators have not been successful at regulating Ant despite other fintech pioneers' blatant failings. However, this time he miscalculated how far he can push and the more conservative voices in the party have finally gained an upper hand.
If Ma is doing anything worth a Billion dollars in China you can be sure he has the support and approval of the CCP.
The CCP is not a hivemind. He probably previously had the support of some fraction of the leadership but overplayed his hand and left himself exposed to those more critical of him. In patronage politics, _never_ write checks your patron can't cash.
Ma was not Elon Musk of China. He was routinely ridiculed for his heavily romanized views on many topics.
No one was surprised by his laughable showing in the chat with Elon at WAI 2019 where he behaves like a fraud.
His backing from powerful hidden political figures are well acknowledged. Although that's not new, anyone who commands such power are backed that way, this pattern can trace back to Qin and Han dynasty.
If anything that makes him sound more like Elon Musk. Loved by some and ridiculed by others. Also, it's not as if Musk's alarmism about AI is any more grounded in truth than Ma's idealism.
No Elon is goofy but Ma proved last year in his sit down with Musk that he doesn’t even have Jr. engineer levels of knowledge. He only has wealth and a name because he has connection while Musk had to be competent to gain his wealth. I do not like Musk but the two aren’t compatible Ma is an actual fraud.
I think the Elon hate is overblown, but everything he has to say about Covid is outright dangerous, let alone stupid.
Ma isn't an engineer and doesn't pretend to be, which is why you can't take anything he says about AI seriously. I'm sure he's corrupt in the same way a lot of Chinese businessmen are corrupt. That said, you don't go from being a tour guide to building a e-commerce platform with arguably the most sophisticated supply chain the world solely by being a fraud.
Anyone have decent understanding of it technology don't like Ma. He was loved more like how Trump lovers love Trump.
Oh yeah that one was painful to watch.
https://m.youtube.com/watch?v=aHGd6LqAVzw
English is not Jack Ma’s primary language. However, English is Elon Musk’s primary language, and admittedly, he sucks at it.
Jack Ma is competent in speaking Mandarin Chinese. So the equivalent would be to force Elon Musk to debate against Jack Ma in Mandarin.
That was not a debate, it was Jack Ma trying to bluff his way to the audience and Musk has to intentionally dumb down himself to not embarrass his fellow billionaire, and failed
> He was routinely ridiculed for his heavily romanized views on many topics.
Many would say the same about Musk
sorry to ask, but what does "romanized views" mean?
Romanticized maybe?
I suspect it means “westernised”
Very poor writing of mine...
> The real question people are asking is why now?
These why now questions unfortunately never have satisfactory answers. Too early: there is no scam/govt is stifling innovation, in the middle: not enough proof, late: why regulators were sleeping till now.
Maybe some people of power who get involved and want to reap benefits. Maybe the company found in 2013 is too new for the government to catch up. China does not have a long established financial industry like developed countries. State capitalism has just started four decades ago. Maybe Jack Ma knows regulations will come out soon and just made public opinions before regulation rules are revealed to the public.
I do not have any source to back my guesses.
> China does not have a long established financial industry like developed countries
You can make a shady case for modern western idea of finance but China has had a strong finacial industry for centuries.
I also saw that 3B to 300B leverage mentioned in the FT and I was surprised that it didn’t get picked up by the non-economics-related media, they all insist on “Chinese government bad because it didn’t let China’s most successful entrepreneur do his thing”.
We’re talking about a leverage ratio of 100, that’s a crazy figure, if I’m not mistaken Lehman’s leverage ratio when it folded was of “only” 30.
According to
https://youtu.be/HnCBbiCetSg?t=569
, the S-1 equivalent filing of the IPO showed Ant itself putting up 1.68% of its own money towards its lendings. That's way more leverage than the 8% mandated in Basel III.
It's also worth mentioning that Ant securitized its loans, creating a CDO-like structure. Pretty risky stuff, per my limited knowledge on finance.
Either way is a failure for the CCP: it looks bad for letting the offering get this far, or it looks bad to future entrepreneurs for blocking it.
It is indeed a failure letting it go this far without enforcing regulations.
That being said, this mode of failure is ten thousand times better than having the bank fail a few years down the line, so it's clearly by far the better choice.
This should be a wake-up call to the CCP to reduce their cronyism with the billionaire class, but I'm not sure they will take heed.
It's not even cronyism, it's out and out negligence. The ruling class in China is too busy jockeying for position in the plenums to be bothered to enforce the law and rein in billionaires that are running rampant through the Chinese economy. (Which law enforcement is your _job_ by the way. Your job is not impressing your cadre.) These days the business class literally has to be doing something this outrageous to draw any of Beijing's attention.
What will happen is that the rats will scatter and hide for a while until the ruling class goes back to power hunting. At which point they will come back out and begin engaging in similar outlandish behavior while trying not to wake the tiger.
Well, seems like the US is even more negligible, they let the whole financial system collapse before doing anything about it.
It saddens me that a democratic regime became comparatively as corrupt as a totalitarian regime. We cannot let the idea of democracy die because of short sightedness of corrupt business and political leaders.
"The ruling class in China is too busy jockeying for position in the plenums to be bothered to enforce the law and rein in billionaires that are running rampant through the Chinese economy"
Yup, the problem of the Chinese economy (and state, in general) are the billionaire "running rampant".
Hint: when your position is to the left of CCP, perhaps it's time for a pause.
I don't think it is a case of the CCP stopping all entrepreneurs, but a case of them choosing which companies succeed and which fails.
This is pretty clearly the CCP intervening in the economy in order to stabilize it and avoid a financial crisis. I don't think this counts as picking winners and losers. I'm not sure that reclassifying something that is clearly a bank as a bank then enforcing the international agreements it would be bound too is picking winners and losers, it's just regulation.
The issue is moreso that Ma seemed to somehow have captured the regulation to delay this, and only now, with the huge attention, was the regulation enforced.
Are you referring to something specific?
> assets of 3B lends out 300B
My understanding is that the loans don't go on Ant's books, they just sell them on. In that case, Ant's assets are irrelevant, since they're not the ones taking any risk and, thus, don't have to cover for the losses.
Even if they are just “warehousing” the credit this would be false, as they need to hold some of those assets on balance sheet while they try to sell them.
This balance sheet is indeed what regulators would require them to hold capital/reserves against.
Further, what’s the documentation that they “just sell them on” end if they do, why wouldn’t their balance sheet shrink??
Yeah I don't know the full Ma / Ant story.
But that pawn shop comment, man if that's really related to the fact that pawn shops exist because something backs the loan ... and if Ant is really as big as folks say it is (I'm talking about my ignorance here, not anything deceptive) and it is could have a huge impact on Chinese banks.... that's a lot to worry about.
I don't pretend to know China's motivations or etc, but I think there may be very real regulatory concerns.
Where do you get the 3/300B numbers? Didn't see them from the article. If true, that would be an insane amount of leverage.
Sorry I don't have an English source but translation
https://translate.google.com/translate?hl=en&sl=zh-CN&u=http...
If the situation is how you describe, the most important question would be: who is holding these securities? If it's just some random Chinese savers looking for higher interest, there is not necessarily a problem. Of course, a similar situation was a problem in the USA context in the previous decade, but that was due to the particular circumstances. Those who had extracted rents by pretending to "insure" MBSs had used a portion of those rents to pwn the USA political structure. When it was clear that MBSs were worthless, they chose to destroy our system of representative government rather than taking bankruptcy. That wouldn't be an option in China, and it certainly wouldn't be an option available to random small Chinese savers.
I like this take
Ant IPO debacle shows me that the rich and powerful, in the capitalism sense, are incredibly consistent in their thinking; even the one raised up in a communist totalitarian country.
They simply cannot think from any other perspectives that can reveal their fundamental flaws.
Unlike communism authoritarian, who at least can admit the effectiveness of capitalism in mobilizing the society in economy activity.
Ultimately, I think this is a case of the incentive structure and material reality of those people shaping their worldviews and actions.
This shared environment lead them to a worldview where myopic self-interest is the only thing that matters.
In other words, I think the shared material environment dominates culture and upbringing, and leads to transcultural trends here.
>If I still cannot make you understand, please google "2008 MBS ABS". You'd be surprised at the similarity of what Ant's been doing and what caused the financial crisis.
blaming financial crisis on ABS/MBS is wrong. Some ABS/MBS may be very risky and it is just fine. The Ant's ABS sound like very risky and it is just fine. An informed investor may as well choose to play with such a risk for a high premium.
The true cause of 2008 was humongous amount of cheaply bought CDS because the underlying MBS were rated AAA which is several orders of magnitude higher then they should have been. It is like a somebody buying for $1 a $1M "life insurance" - basically betting - on a life of a 100 year old person. An insurer selling such insurance (ie. CDS) would quickly go bust like it happened in 2008.
Colour me biased but how is innovation supposed to thrive in an environment where a "miscalculated talk" is enough to halt a $37b IPO?
I had heard Matt Ridley speak about how [0] innovation thrives where there is "freedom" and gives me doubts about China's capabilities to innovate as much as it wants to.
[0]
https://www.aier.org/article/matt-ridley-on-innovation/
Well from actually regularly visiting China and having a team reporting to me on ground, i don't think lack of innovation is remotely the problm in China. In terms of a digitised economic model impacting regular Joes,m China is a few years ahead of where other markets are.
When drawing conclusions, it's a good idea to test theories against hard evidence - BOTH factual and counter factual.
Think tanks are notorious for cherry picking the factual evidence and ignoring inconvenient counter factual evidence due to the nature of their mission. That's the reason think tank reports don't make the grade of peer reviewed articles in prestigious academic journals.
Thank you for this. I didn't remotely say that China isn't innovating. I meant to say that if China has ambitions of becoming a _world leader_ in innovation, this kind of party sponsored innovation / innovators isn't probably the right way to go.
Yup, Think tanks devolved to (or started as?) propaganda machines. Nothing more.
> i don't think lack of innovation is remotely the problm in China
From your on the ground experience, what do you think _is_ the problem?
So what's happened i think is a bit of
(1) Very rapid provincial/local government supported innovation and economic expansion across the board with little time for more "big picture" regulatory and risk management frameworks to catch up
(2) a large growth in the number of relatively inexperienced financial market investors created by the expansion who fuel boom and bust market cycles.
What you see is a bit of power balance struggle that is happening as the regulatory and risk management pieces of the government catches up to the expansion and innovation. It's happening across the board - financial, environment, safety, data privacy regulations (ie. companies buying/selling data) etc etc - these headline grabbing actions are one way to build popular support.. not too different from how prosecutors amd regulators operate in the West actually.
I'm sure you're not aware but quoting Matt Ridley is deeply ironic given he was chairman of a UK Bank with an innovative business model. Quoting Wikipedia:
"Under non-executive chairman Matt Ridley and Chief Executive Adam Applegarth, Northern Rock had a business plan which involved borrowing heavily in the UK and international money markets, extending mortgages to customers based on this funding, and then re-selling these mortgages on international capital markets, in a process known as securitisation.
On 14 September 2007, the bank sought and received a liquidity support facility from the Bank of England, to replace funds it was unable to raise from the money market. Reporting of this complex scenario led to panic among individual depositors, who feared that their savings might not be available should Northern Rock go into receivership. The result was a bank run – the UK's first in 150 years – where depositors lined up outside the bank to withdraw all of their savings as quickly as possible, particularly since many others were doing the same."
I think freedom to innovate and non free nations tend to be SOMEWHAT conflicting things yes.
Having said that, I think China's concern may at least partly really be regulatory in nature ... or I suspect they would have good reason to be concerned. (I really don't know their motivations)
Ant doesn't like / want to be a pawn shop... kinda makes you wonder what if anything their loans are backed by / what would happen if they grew even bigger and imploded.
China has nothing against innovation. They just want to decide who gets rich with it and how much.
> _China has nothing against innovation. They just want to decide who gets rich with it and how much._
Is this sarcasm?
If I am ambitious, why would I be an innovator in this system? Versus the person deciding who gets rich?
> why would I be an innovator in this system
For the same reasons people build better lives for themselves in places even less hospitable to their personal aims. Lack of resources, family, lack of practical freedom... the list goes on. Hell, some people actually are patriotic.
But frankly, I do think this matters much less than people are making this out to be. Larger-than-life superhero CEOs are bullshit. I do not believe you needed Musk or Kalanick to get things that look like their companies. US culture just desperately wants to believe in their homemade gods, so you get conversations like this.
> _Larger-than-life superhero CEOs are bullshit_
This is well written. Thank you.
If you believe in the exceptional, or believe you are exceptional, America will draw you to it. If you don’t believe in exceptionalism, America looks like it incurs costs for no gain. The Chinese system in contrast looks balanced.
I believe in exceptional people. Almost every measure of a variety of skills has long tails. In most cases, those tails are developed through working at a skill and are not the sole product of innate talent. Incentivising that development thus makes a civilisation more capable.
But I’m not so wedded to this belief as to claim it the only way. If exceptionalism is a fiction, freedom of speech doesn’t make sense: there are no special thoughts which, if extinguished, are unlikely to recur for a long, long time.
In moving from Canada to the USA, this makes sense.
In undergrad one economic history prof basically argued America is just a wider bell curve you overly onto the Canadian bell curve. Left side of the distribution you might consider immigrating from USA to Canada because of the wider social net, very far right side of the bell curve you might do the opposite since the ability to generate and keep economic rewards is much higher in America. Obviously a simplified argument but it sort of makes sense. If you look at Mary Meekers appendix, a good chunk of founder CEOs are foreign or second generation foreign born.
> If exceptionalism is a fiction, freedom of speech doesn’t make sense: there are no special thoughts which, if extinguished, are unlikely to recur for a long, long time.
This comment makes no sense at all. The threat which freedom of speech is designed to protect us from is not attacks on exceptionalism, but oppression and control by the hands of a dictatorship. It matters nothing if you feel you're exceptional or you just happen to disagree with anyone in power over any subject, be it critical or irrelevant. What matters is that no one should have the right to deny you the ability to freely express your ideas, because that would represent control over all aspects of your life and existence.
Pardon me, I was unclear in my wording.
Replace “doesn’t make sense” with “isn’t competitive.” If exceptionalism is a mirage, freedom of speech incurs a cost on a country for no gain. _Ceteris paribus_ others without that drag will have an advantage.
> Replace “doesn’t make sense” with “isn’t competitive.”
Is your correction supposed to be an improvement? I mean, the statement "If exceptionalism is a fiction, freedom of speech isn't competitive" makes even less sense. It makes no sense at all to talk about freedom of speech incurring a cost. There is absolutely zero cost in not persecuting anyone for having a different opinion.
> _There is absolutely zero cost in not persecuting anyone for having a different opinion_
Of course there is. If anti-vax and anti-mask advocates could be silenced by the state, public health would improve in the short term.
Freedom of speech is effortful to maintain. It takes effort and self control for a society to tolerate opposing views within itself. Forgetting this risks the freedom itself.
> If you believe in the exceptional, or believe you are exceptional, America will draw you to it.
Right until the moment we saw how America (society and government) handles pandemics and school shootings.
Even a decade ago, what you said would have been true but now in the medium term, I'll pass :-)
It's a pity.. such an incredibly beautiful country.
> If exceptionalism is a fiction, freedom of speech doesn’t make sense
I think this only holds if you take a deeply communitarian outlook, which is somewhat difficult to mesh with a belief in the value of the exceptional individual.
I value freedom of speech for the same reason I value other freedoms, for the boringly baseline and everyone else, as well as for instrumental reasons - briefly, freedom is its own good because humans are wired for it; and suppression of speech leads to broken, damaging government.
In any case, small clarification - I do believe that exceptional people in the sense we're discussing exist. But they are far rarer, and the Superhero CEOs we're talking about are not those.
Replace “doesn’t make sense” with “isn’t competitive.” If exceptionalism is a mirage, freedom of speech incurs a cost on a country for no gain. _Ceteris paribus_ others without that drag will have an advantage.
Freedom of speech is not utilitarian. It's thought of as a right.
The idea that freedom and free speech are important because they make certain processes more efficient is entirely missing the point of the humanist revolution. Freedom is innately good, for its own sake.
So show me SpaceX somewhere other than the US. SpaceX exists solely because of Musk and the culture in the US that encourages his kind of risk taking. It literally would/could not occur anywhere else and even now, with the successful example it is setting, other countries are having an extremely hard time replicating it.
The impact and innovation of SpaceX is much lesser than that of, for example, NASA or the Soviet space program. Eventually, its capabilities too will be matched, and exceeded, probably by at least one public program.
So true, most of what spacex is achieving is 1960s government developed technology, yet it is herald as some proof for private sector being better suited for innovation.
Most of the technological achievements of the last century we're done by governments, the private sector was very good at productization of these acievements, but it's inherent shortermist thinking actually stifle innovation.
This is true. SpaceX is applying modern tech to ideas from governments in 60s to 80s.
For example, the idea of reusable rockets with the first stage landing vertically actually originated at NASA in the 70s. It wasn't pursued because realizing it at the time would require a human to guide the descent, which makes it very impractical.
SpaceX applied modern tech to an old concept, a reusable first stage via powered landing. They didn't do that much innovation. Landing a booster was already a solved problem, now the matter was to scale it up and automate it.
> _Landing a booster was already a solved problem_
It was solved _on paper_. SpaceX did it.
Note, too, that nobody else was thinking about solving this problem in 2001. Or 2011. Space had become a jobs program per ArianeSpace and ULA.
People landed rockets vertically in real life for decades beforethen.
What SpaceX did was to put a second stage on top of that, scale it up, and make it automatically guided. You're going to have a very, very hard time arguing that this is anywhere even near the level of innovation that NASA or the Soviet space program achieved in a third of the company's lifetime.
As for the stagnation in space, sure. That's the issue with government programs in our current paradigm, they are heavy and the best course of action is seldom taken. Also, for some reason the US has an aversion for SoEs, so NASA, for ideological reasons, wouldn't have been allowed to make their own reusable launch vehicle and make a profit out of it.
the soviets had a pretty successful space program back in the day...
They threw the whole resources of a nation state at it to do it as well, vs the bootstrapping of one guy with about a hundred million bucks.
It takes the right guy and the right environment to make that kind of magic happen.
They really didn't. The Soviet space program operated with around a third of the US Space program (about one 200th of the USSR economy in 1970), or the equivalent of, give or take, 30 billion 2020 US dollars, or around 10 times the budget of SpaceX, notwithstanding technological price deflation.
With 1970s tech and only ten times the budget, the Soviet space program certainly innovated a lot more than SpaceX did, in all fields, from computer science to basic physics, to metallurgy, to jet engines, and built more ambitious missions.
Probably less relevant in the musk case where he originally financed the organization and later took the ceo role. The “I believe and/or will fund this” + CEO combines and confounds the effects.
Sure maybe multiple people could have taken Uber from $100M of revenue to whatever the current day performance is, but at the end of the day it was him and the other two dudes (from the book) that quit their jobs and did it (and raised money from an Internet forum, etc).
This is the whole man in the arena argument by Teddy Rosevelt. Easy to say from far, but probably harder to do; like that old saying that work gets harder the closer you get to actually doing it.
Respectfully.
> originally financed the organization and later took the ceo role
Regardless of him being a founder or a usurper, I don't think Tesla or SpaceX would have been the businesses they became without Musk. He was the primary driving force behind the initiatives that led to their current day success.
It reminds me of the "but you didn't" argument, said in response to someone looking at a painting or piece of art and saying "I could have done that". Maybe many people could have done for Tesla what Musk has done, but they didn't.
:)
Source:
https://en.m.wikipedia.org/wiki/Citizenship_in_a_Republic
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” (1910)
"But frankly, I do think this matters much less than people are making this out to be. Larger-than-life superhero CEOs are bullshit. I do not believe you needed Musk or Kalanick to get things that look like their companies. US culture just desperately wants to believe in their homemade gods, so you get conversations like this."
hear, hear
You're wrong. Look no further than at the Soviet Union and Communist China for examples. While Microsoft was being built in the US in the late 80's...what were Russian and Chinese innovators building? The Russian Bill Gateses were plotting to steal factories and oil wells and nickel mines, the Chinese were plotting to get political posts. Those are the extreme examples. How about Europe? In the late 80's and early 90's almost no major innovative companies came from Europe. What explains that?
Having lived a few short years in a communist country it’s hard to describe just how corrosive the mentality is. Institutions matter so so so much. America is unbelievably blessed.
This is terrible to say, but you have to (my belief) basically wait for that older generation to die and the newer one to mature to undo the effects of that regime.
There is a crazy game theory degradation when you lose trust and corruption rises. It’s hard to convey just how insidious and broken such a society is. And this is communism, not socialism which appears to be fine based on Western European experience.
One of Mitt Romney’s coworkers at Bain wrote a book a few years ago and France is actually more productive than America and has grown faster, as measured on GDP dollars per capita per hour. Aka they are more productive. Yet USA works like 2100 hours per year and France is closer to 1700, which is why you have the GDP per capita differential.
End of the day, institutions matter.
Sounds like France is getting the better end of the bargain.
And that does not even take into account rate of endebtment. Nor the fact that the US has several historical advantages, like the role of the dollar, or the fact that they emerged out of WW II with 'only' 250k dead and their economy and infrastructures intact.
This is true. But it's not relevant to GP's point. GP is decrying the culture of hero-worshipping individuals, instead of appreciating the system that allows them to flourish.
It’s a trade off Chinese businessmen have to live with in China.
Most medium-big All companies have one or more board members coming from the “party”.
It’s not a secret they very calmly tell you the same thing when you visit them in China.
> _It’s a trade off Chinese businessmen have to live with in China_
Agree this isn’t news to anyone familiar with China. What led Ma to make the alleged comments is beyond me.
That doesn’t invalidate discussing its effects.
> If I am ambitious, why would I be an innovator in this system? Versus the person deciding who gets rich?
Why would the person deciding who gets rich let someone else become such person? I mean, it's not impossible, but is certainly very hard, risky and needs some unique skillsets.
Sometimes you don't have the choice, no matter how you are ambitious.
> _Why would the person deciding who gets rich let someone else become such person?_
No man rules alone. And no man is immortal.
If you are smart, ambitious and lucky enough to build a multibillion dollar company, you can put those faculties to work climbing the political ladder.
I agree, the system certainly encourages you to climb the political ladder, and overall this affects innovation, but things are not binary, what you described may be 100% correct in 60s and 70s, less so in 90s, and during the last 20 years I'd say for those who without background the expected P&L is worse if you play the political game, compared to the entrepreneur route.
I'm sure Jack Ma is still rich.
What else are you going to do, not try anything?
On the other hand I also hope the financial elites would stop innovating with shits like "sub prime".
You still don't get it. The innovation is not that it exists.
The rest is left as an exercise to the reader.
Mobile payment and other real innovations aren’t killed. But please don’t count risky lending as innovation: it has to be regulated.
Innovation can make lending that seems risky to one party significantly less risky to another.
Example: you think lending to folks with low credit scores is a risk, but I evaluate credit in a different way that lets me discover that some folks with low credit scores really are credit worthy.
Note that I am not supporting Ant Financial with my comment. I have no clue how their business works. But your comment is missing a key point.
The point is that we're regulating the risk you're allowing to take with other people's money. If you believe (or claim, which is a different issue) that "some folks with low credit scores really are credit worthy", then you're free to take on that risk and profit from it if you're lending your own money.
However, if you're playing with someone else's money, then you do not get the privilege to make arbitrary calls on what's risky and what's not; the society has to presume that you may be mistaken or lying (especially because there's an incentive to lie), we have to discard and ignore your novel, innovative evaluations, and evaluate the risk according to some conservative measure that other people trust. I mean, it's not about being allowed or disallowed to make the loans, it's about capitalization requirements to cover the risks i.e. the need to back up your assumption that these people really are credit worthy with your own funds.
Innovation on better credit evaluation can help you lose less money on bad loans, which directly impacts your profit as a lender; but it can't (or at least shouldn't) be used to justify that you deserve extra leverage so that you'd have lower capital costs; the capital requirements are there to protect others from your risk-taking.
And if you leverage that 100:1 (300bn:3bn) you vilate a metric ton of banking regulations and responsible practice. It's not an industry for fast change or pivot especially when you're looking at a company leveraging itself so far beyond the more average 1:1 or 50/50 for banks. \
100x typical risk is not something most investors recognize as real let alone a sane investment. A financial advisor would ask how the fund is making a 100x return and step faaaar back from that portfolio.
Yup. "Move fast and break things" is not a good motto for things we literally called "too big to fail".
What do you think the bond market is, if not risky lending? It's pretty much the engine of our civilization.
You are free to grow as much as you can until it’s time to harvest
I think this is definitely the western assumption from events like this, that the regulators want a cut, etc. The real risk here is that once you grow big enough to pose a real risk to economic stability, AND you are clearly not publicly pledging your fealty to the state, then you get 'out of control' and Chinese culture would support reining you in. While this may seem corrupt to the US lens, I personally have to admit that this kind of action strikes me as politically savvy. Regulate before Jack makes the statement, and it seems like stifling innovation; don't regulate at all, and the capitalists gain power.
Is that the Matt Ridley that destroyed the Northern Rock bank while being chairman of it for 3 years ? His time culminating in the first run on a British Bank for 70 years and forced nationalization?
I genuinely would not pay attention to one word he says or writes, it bewilders me that anyone does.
_>how is innovation supposed to thrive in an environment where a "miscalculated talk" is enough to halt a $37b IPO?_
Fwiw that can happen in the US too. If a corporate exec says something unwise during the pre-IPO quiet period, the IPO can potentially be scrapped.
And there other consequences to unwise public statements, like when Elon Musk publicly claimed he had a major new deal, which moved markets and then turned out to be a lie. He got bitch-slapped by the SEC for that.
Matt Ridley certainly made maximum use of the "freedom" that was available to him.
It all depends on what kind of "freedom" one talks about.
If it's things like free speech and a wide and colorful political spectrum, then yes, China basically has no freedom.
But if it's economic freedom, China has _way_ more than most western countries.
Remains to be seen which kind matters for innovation.
Given that free speech/free flow of information is a fundamental building block even to economic innovation, I'd say this matters more. You can have all the economic innovation in the world but if it offends a party, it's unlikely to be widely adopted isn't it?
it's not necessarily about who has more it's probably about who has enough freedoms of all kinds
and we have a situation where political freedoms a shrinking every where with different speeds and from different starting points, economic freedoms are moving in different directions all over the world even inside big countries.
without a very complex model of all of it it's nearly impossible to tell what combination is the most favorable to a particular kind of innovation(for example face recognition might be a lot harder to innovate in a country with great political freedoms regardless of economic freedoms).
> how is innovation supposed to thrive in an environment where a "miscalculated talk" is enough to halt a $37b IPO?
Wait and see. This is just one week in a 20 year journey.
Ma hasn't lost anything.
Yup, I wonder why US stifling innovation by putting regulation on what people can say on YT/Twitter/FB etc.
The global tech industry is a farce. There hasn't been any real innovation in a decade. It's top-down, bureaucratic, government-oriented, debt-fueled, hype-driven, risk-averse... It's not just that there is no innovation; people forgot what innovation means.
Jack Ma is right in pointing out and then proving to us how terribly financialized the world economy has become (it's not just China). The stock market has nothing to do with the economy, it's financial (and political) theatre.
The environment built a company that could have IPO'ed for 37B. That's more than what most systems can accomplish, and on balance that may be enough, or ability to limit is even favourable.
The truth is Chinese system is also quite flexible at all levels and people commonly do not follow the rules or use different interpretations and implementations (at very least they workaround a lot). The audit system for many industries are not mature as well.
So yea ironically if you are a Chinese innovator at early stage you might find there’s much less restrictions in China to innovate (not necessarily from moral high ground as long as it’s lucrative ) than the US. Later you become big and draw more attentions but hopefully you know how to play by the rules. I personally don’t think it will make early stage innovation harder
>> The audit system for many industries are not mature as well.
So bribery? Is that what you mean?
If you're the only player in a new field you essentially set the expectations
I mean regulatory system. So you can do something that can be heavily regulated in USA, not necessarily illegal
Except when your early innovation threatens an incumbent who has party connections.
I imagine those scenarios don’t go well for the early innovators unless they themselves have a party sponsor that out ranks the incumbent.
Well luckily the party itself isn’t so innovative
ANT practices a surveillance backed micro financial lending for consumers.
How can that innovation justify the astronomical risks?
China’s securities industry watchdog said subsequently that recent regulatory changes could have a “major impact” on Ant’s business structure and profit model
Fabulously successful Chinese businessman criticises China. China government's response: "That's a nice business you got there. Would be a shame if anyfin' were to 'appen to it."
China certainly wants massive internationally successful businesses, but Ma's remarks were very poorly timed. Given concerns outside of China about a loose oversight & regulatory process amidst an economic crisis, Ma's remarks played right into those criticisms. Not a smart move with an over-sensitive & censor-happy regime. Which isn't meant to justify China's actions, only to observe that the consequences of Ma's remarks weren't exactly unforeseeable.
That's the difference between China and the US. In the US Capital reigns over politics, in China politics reign over Capital
Unlike America where it's just bankers.
It’s certainly weird to deliver a speech about how you operate in the gray area of regulations to facilitate risky loans _and_ you’re proud of it _and_ regulators are all wrong when said regulators are sitting in the audience...
Where did you read about the content of the speech out of interest? The article linked is pretty vague and makes it sound like he just over-aggressively criticised regulation and said there should be reform, which is just what every billionaire business owner says about the regulations in their space.
I haven’t seen a transcript or even an outline of the speech, but there were previous reports that went into a little more detail, e.g. also from Reuters,
https://www.reuters.com/article/idUSKBN27J0D4
:
> The outspoken billionaire railed against the Basel Accords, a series of international regulations that require banks to hold a certain amount of capital, as outmoded for the modern era. He also accused Chinese lending institutions of having a “pawnshop” mentality of using collateral instead of advanced credit ratings and watchdogs of not knowing the difference between regulation and supervision.
And on new regulations in draft stage to cover the current gray areas
https://www.reuters.com/article/idUSKBN27I1WB
:
> While it made no mention of Ant, the draft comes as regulators sharpen their focus on banks that heavily use micro-lenders or third-party technology platforms like Ant for underwriting consumer loans, amid fears of rising defaults and deteriorating asset quality in a pandemic-hit economy.
I derived much of my understanding of Ant not from reporting, but rather, from talking to local sources who are more familiar with the matter. I’m on mobile now so won’t expand on this complex topic... However, if you know the Chinese language you can find plenty of criticisms of Ant’s personal credit/loan products (which, for instance, offer unsecured credit and loans to people with absolutely no income and/or collaterals, like college students, and coupled with aggressive marketing from online marketplaces including Alibaba’s Tmall, lead to hopeless debt cycles); probably less about risky business loans.
Since you might know the answer, I've been curious how delinquency is handled. When someone borrows and stops repaying do they get sued? Is the power of Ant's payment network so strong that getting banned is enough to keep people repaying?
Usually no as it does not scale. They usually use several (third party) "debt collection" services which operate in a questionable way (I'd call it mafia-style). Examples of what they would usually do:
- Call you 100 times per day.
- Call you family and your friends and your colleague daily (via contact data collected by their apps)
- Threaten (but not actually do unless you owe them a lot) to sue you, in a way maximizing your stress.
- Visit your family in person and "politely" ask if they know you are in debt.
Google "花呗 催收" or "借呗 催收" then use Google Translate if you want to dig into this.
That also happens here in Europe...
I live in Europe ( Belgium) and that's bullshit.
My dad had to receive money from someone who couldn't repeat their debts and there was an intermediate party that came to talk about everything and propose a plan.
Try to ignore that intermediate party and see what happens.
As a sibling comment said, outstanding debt is sent to collections after a certain period, similar to how credit card debt (and all kinds of other debt) is handled in the U.S., and maybe in most parts of the world?
Can’t comment on implementation details since thankfully neither my contacts nor I have experience with collections. (Btw, once upon a time, my Experian credit score dropped by like 150 points after a mysterious debt appeared on my credit report; turns out someone else’s debt was mistakenly put on my file. Luckily my name wasn’t also “mistakenly” sent to some collections agency. Definitely scared the shit out of me.)
Indeed. I had the same feeling. The article mentions that the regulation changes were already known.
This is just me speculating, but what if Jack realized the IPO would be a disaster (for that reason or others) and decided that this was the best strategy to halt it without recourse?
I dunno, reading the article I get some mixed feelings about this.
On one hand, it doesn't seem that bad that regulators can rein in even the biggest players and at least judging from the description the move may not be that bad for consumers. What if Ant is indeed taking too much risks and now is on its way to grow to too big to fail?
On the other hand, the timing and turn of events look very capricious to say the very least.
Do you think it's better for China's regulator to rein them before the IPO (with delaying the said IPO) or after the IPO?
if the regulators rein them after the IPO, the stocks gonna crash for sure and people will speculate that the regulators might play insider trading or simply cheat international investors.
They should have reined them in long before the IPO date this week, when they were supposed to be doing their due diligence and assessing the risk that ANT's lending practices pose.
The decision to do so after this PR broadside from Jack Ma appears (to some) as a political statement, and not truly policy-based regulation.
> turn of events look very capricious to say the very least.
In so many places that's the only way when hotshot businessman's tactics get investigated. Otherwise they wine and dine with top politicians and their brokers. So regulators can't touch them.
I wonder how much of this is deliberate realpolitik calculation on the part of the PRC: Amidst international concerns about their regulatory & oversight process, Ma gave them an extremely visible opportunity to appear to crack down in a way that increases their regulatory credibility. They don't even need to actually change anything: They can simply let Ma pay lip service to addressing regulator concerns and proceed with the IPO in another 6 months with very little lost except a bit of time. China then reaps the benefits of both another massively successful corporation and the perception of tighter regulation.
Or is it a brilliant move to justify the introduction of Ant in NYSE/NASDAQ ?
It is hard to imagine that Ma did not anticipate the possibility of the regulator reacting to his speech. If he did anticipate, then it becomes part of the plan. If he did not anticipate it, then it would be a mistake.
I don't know - but it is kind of naive to assume that he did not know what would happen after his speech.
Sure, it's wrong for the PRC to retaliate against criticism. On the other hand, when regulators of an overly-sensitive & censor-happy regime start taking a closer look at you, it's probably best not to poke them in the eye. Again, that doesn't justify things, it's just that the consequence were probably foreseeable.
This post suddenly fell off the front page ~6 hours ago and now reappeared. Moderators manually unflagging it?
The post got more comments than upvotes, which triggers the flamewar detector. Most likely dang woke up, checked his notifications and decided that it was a false positive.
Poor dang, always working for us tirelessly. All hail dang.
I find the language used by Reuters odd. Can someone explain the odd amount of glee it seems to take at Jack's change of fortune? I am not aware of any inherent bias thus, but I can't tell if Reuters is becoming more clickbaity or there is some actual bias behind it.
Im curious if this will have chilling effects on investment in China.
Learned something about the pawn shop industry in China. Had no idea.
News finally started to emerge about Ant after this incident. It turns out, Ant is more of a loan shark, and giving out loans at 15% interest.
However, Ant is operating as a financial company, but without the regulations of a financial company. Meaning that Ant was only keeping 2% of money to back up their loans, and lending out at a 50-to-1 ratio. Whereas financial companies had to keep 30% available.
And there were other news that Ant was merely acting as a finder, and routing the customers to the banks, who took on the financial risk of giving out the loan.
All of it sounds rather risky. Things are good when the good times roll, but what happens when the wheels fall off the car?
Ant’s premise was that they were smart enough to know who were good credit risks, and who wasn’t, by using their AI system to monitor things on your phone, like your battery life, and how quickly you paid your bills.
Things that quite frankly sounds superficial and irrelevant in the greater scheme of things.
The basic question is: What happens when the music stops? Who will be left to pick up the pieces if Ant fails?
It seemed like a giant scam. I think the CCP got cold feet and use Jack's comments to avoid a much bigger embarrassment.
Oh give me a break with this fell to earth nonsense. The IPO isnt cancelled and its not lile Ant Group has somehow become a weak business. Eventually they will get to the IPO stage and I suppose the markets will reward or punish them for theit financials.
People don't want to think. It's easier to just slot this into the "WeWork" bucket and ignore all the details.
Honestly I lost all respect for Ma when I watched him debate Elon on the topic of AI last April [1]. Elon just ran circles around him. Like, Elon was playing chess and Ma was playing hopscotch with a football helmet and padded gloves.
That video gave me a lot of insight into Ma's character, and frankly, the contents of the article were thoroughly unsurprising in that context.
[1]
https://www.youtube.com/watch?v=WSKYWu-S2G0
It's extremely difficult to say that Jack Ma is an idiot because of his discussion with Elon Musk. Jack Ma has to play a parallel game of high-stakes political poker.
And do it in a non native language.
In Germany my friends spoke very good English, but there were still times they'd sound like the drunken ramblings of a native speaker.
Only later on I'd realize the points they were trying to make and that they were running rings around me intellectually, just having trouble expressing it.
That experience has left me more or less giving a free pass to ESL speakers saying things that sound dumb, especially when it's off the cuff.
It’s what he was saying — not how, in particular the part where he believed machines were incapable of being smarter than humans, because if you try to compete with them in an area they’re good at you’re dumb for doing that. He then contradicted himself by using the example of a human in a foot race with a car. Then he states that human intelligence comes from the soul anyways.
To be fair, Jack Ma was an English teacher, has a Bachelor of Arts in English from Hangzhou Teachers University and he was an English lecturer at Hangzhou Dianzi University. While he may have an accent his communication style is quite clear IMO.
If I thought this was at all a language or communication issue I’d never have posted it.
> It’s what he was saying — not how
You also need to take into account to whom he was saying it. Although they were ostensibly talking to each other, Musk was speaking to the fears of Americans afraid their jobs might get automated, while Ma was addressing Chinese who hope their jobs will get automated.
Consequently, their definition of "smart" is not the same. Musk equates smartness with being good at your job, while Ma thinks it's better to be "street smart" and let someone else do the work for you. Or in the car vs. human example, why try to outrun it if you could be sitting in the driver's seat?
> Then he states that human intelligence comes from the soul anyways.
I thought that was a clever riff on Musk's somewhat awkward "AI means love in Chinese, right?" conversation starter.
> To be fair, Jack Ma was an English teacher, has a Bachelor of Arts in English from Hangzhou Teachers University and he was an English lecturer at Hangzhou Dianzi University. While he may have an accent his communication style is quite clear IMO.
I don't know whether you've ever experienced a foreign-language class taught by a non-native speaker, but I've taken Academic Writing classes in English at a top Chinese university and the quality was terrible. English literacy is rare in China even though it is a mandatory subject, so the bar to becoming a teacher is quite low. Often, they'll have an excellent breadth of vocabulary, while being unfamiliar with many idiomatic expressions and cultural references that come naturally to a native speaker.
That said, I did think he was communicating quite clearly, but since my understanding appears to be quite different from yours, maybe that's just a reflection of our different expectations.
On the other hand, if the event was specifically organized so that they could speak past each other and endear themselves to their respective audiences, it was a genius move.
> "AI means love in Chinese, right?" conversation starter.
Oh neat, a pun which works both in Japanese and Chinese.
_>while Ma was addressing Chinese who hope their jobs will get automated._
Why do Chinese want their jobs to be automated?
For the same reason that a farmer wants a tractor and a seamstress wants a sewing machine. Controlling the machines that do the work is less exhausting and higher-status than doing the work yourself.
Of course not _all_ Chinese think like that, but an optimist view of future technology seems much more prevalent in Chinese-language media than in the English-speaking world. Maybe that's because China is still at a relatively low level of industrial automation and trying to catch up to advanced manufacturing economies like Japan or Germany with their "Made in China 2025" initiative.
And the overall optimism doesn't mean there aren't also critical voices, worried that instead it will be the machines controlling the humans who do the work. E.g. _Renwu_ recently published an article about delivery drivers struggling to meet the deadlines set by the system, which you can read translated into English by Jeffrey Ding here:
https://chinai.substack.com/p/chinai-111-algorithms-and-food...
This is something that confuses me about Americans. Why on earth wouldn't everyone want their job automated? The only thing we should be discussing is how you fairly distribute the proceeds in a world where humans don't need to work.
Because from a realpolitik/game theory perspective if your existence doesn’t contribute any sort of value to others/society there’s little incentive for others/society to keep you around. And that always ends in a very ugly way.
There is a built-in self-limiting mechanism for this. As development level increases (and coincidentally the number of workers required decreases) so does human fertility. Birth rate in the US is 1.77, well below the replacement rate of 2.1; Canada is 1.5, Finland is 1.49, Japan is 1.43. The workers are disappearing peacefully already.
Well he sounds to me like he was struggling. Very much so. If I didn't think he was, I wouldn't have posted what I did either.
I agree the points he was making were vapid, and I stopped watching fairly quickly because of it.
Maybe he really is an idiot, but I don't think this video was at all conclusive proof.
I think words chosen can still affect content and persuasiveness. I've heard Jack Ma speak in person and the most convincing bit was a segment where he switched back to Chinese.
That said, I agree that Jack Ma is far from as technical as Elon Musk, and still consider his spin-off of Alipay (Ant) from Alibaba to be very questionable from a corporate governance standpoint.
100% this. As a English-as-a-second-language speaker, there are times when I wish I could speak up and express my thoughts/emotions in a way that is palatable to the audience (native English speakers), but decided to stay quiet because I am not sure if it'll come out right or because my brain cannot process fast enough to speak fluently/eloquently. I consider myself fairly decent in English vocabulary and reading (not bragging but scored 720 out of 800 in both SAT and GRE verbal), but I still cannot do as well as native speakers in expressing my concerns/opinions during business meetings. Sometimes, I wish the tables are turned so that I can speak my native language and am able to make persuasive arguments in discussions.
Language barrier is real and I am guessing some English speakers may never understand/empathize with the non-native speakers.
Jack Ma taught English at the university level [1]. He wasn't struggling for words, he's just not as smart as some had assumed.
[1]
https://money.cnn.com/2018/09/09/technology/business/jack-ma...
As a sibling reply pointed out, this doesn't necessarily mean as much as you think it means.
Can you link it please? I'm not seeing it.
https://news.ycombinator.com/item?id=25006975
For what it's worth this matches my own limited experience from the early 2000s.
Thanks!
Relevant from other comment:
> I don't know whether you've ever experienced a foreign-language class taught by a non-native speaker, but I've taken Academic Writing classes in English at a top Chinese university and the quality was terrible. English literacy is rare in China even though it is a mandatory subject, so the bar to becoming a teacher is quite low. Often, they'll have an excellent breadth of vocabulary, while being unfamiliar with many idiomatic expressions and cultural references that come naturally to a native speaker.
Jack Ma is an idiot, and he’s just surrounded himself with a bunch of yes men, who can buffer the operational, legal, financial systems that run his empire and mostly protect him ... but his true nature comes out when he’s required to engage in 1:1 discussion with anyone great.
At that point there’s no filter directly to his consciousness and it’s clear, from that video, that’s he’s a total moron.
Idiot, moron, is that insulting language really necessary? There are so many forums on the internet where this kind of demeaning tone is tradition, why not just leave it over there and keep this space clean?
He said it himself: If he doesn't want to do something or it is too difficult for him, he just delegates it, gesturing with his hand like a monarch would do. So the core of your statement is very likely true.
I knew some people who worked in Alibaba at around the time when Ma started to handing over duties to Tsai, and Zhang.
All say the company was actually much better run when Ma was managing company day to day, than when after Tsai took over operations, and himself just hired tons of "pro managers" to hand over errands.
At around this time (2012-2013), Tsai decided to show how much of a serious tech exec he was..., and he came with idea to do what big boy do, and rewrite all of Alibaba's core code into one True Enterprise Grade Java MegaFramework of Doom.
And it was at that time when their website quality started to fall off a cliff, and they started loosing talented people who were off-put by Tsai's management...
I'd say Aliexpress was much better at the time of it launch, than it is now. Alibaba, and 1688 had an even more dramatic loss of quality, and vendor oversight.
P.S. People talk about party affiliation of Ma from him joining the part to be allowed to teach in eighties, while forgetting that Tsai does not even hide his affiliation with the United Front (an organisation for CPC's version of "useful idiots,)" and is a much more outspoken political player, and party appologist.
I've made a couple purchases from AliExpress lately, and the conclusion I came to was that their site is purposefully shoddy to lower expectations.
I’ve never really understood how one can use Alibaba effectively. It’s mostly spam from middlemen who lie about having their own factories. It must be a full time, specialized job being a purchasing manager who can use the platform.
The thing is, their search used to be much better, and they had much better spam control before.
Given that Jack Ma has been a member of the CCP since the 80s [1] I think his success has come a lot easier than Western entrepreneurs
[1]
https://www.cnbc.com/2018/11/27/alibabas-jack-ma-has-been-co...
Does it really matters, i mean US industrial/tech giants all donate to the parties to get some advantage nationally and globally?
Should we be questioning western CEO political affiliations and donations when talking about their companies?
What's that actually mean? Does he even have a choice to not be a member? What are the chances this is rewritten history for PR?
I read in a book about China by New Yorker magazines China expert [1] and he said that up to a third of Chinese citizens are either party members, part of youth groups, or work directly for a CCP owned company.
So it’s not everyone but it’s a lot. The actual CCP membership itself is much lower though. It’s more like an octopus in their society.
[1]
https://www.amazon.com/Age-Ambition-Chasing-Fortune-Truth/dp...
But I guess it's very different for people that have some power like CEOs. I doubt there is a CEO that is not in the CCP.
The article mentioned that Tencent and Baidu CEOs are not CCP party members. It's not a big deal, one way or the other. Journalist and internet pundits simply like to play it up. Most of us don't understand much of the workings of the CCP, partly due to deliberate intransparency partly due to the language barrier. So it's fertile ground for all kinds of baseless speculation.
Even without language barrier, I think most of it is just the nature of politics and holding positions of power. It's not like many of us have a very good understanding of the inner workings of the higher cadres in the (D) and (R) parties, or of the leadership teams / boardrooms of large companies either.
It doesn't mean much more than that some American CEO is a member of the (R) or (D) party. The CCP has 90 million members, it's not some hugely exclusionary club, though relatively speaking a bit more exclusionary than the (R) and (D) party in the US with respectively 33M and 45M members.
As mentioned in the article, the CEOs of the other tech giants Tencent and Baidu are not members. It's simply not a huge deal one way or the other.
Democrats and Republicans can't limit their membership at all.
Not only that, but there isn't even a singular party of democrats or repulicans. Every state has its own party for each.
People can decide which party they are in and the party itself has no say in the matter.
Being a party member was a pre-requisite for becoming a schoolteacher back then, and it seems China is well set to returns to this madness yet again.
I remember watching some of his stuff and thinking, the guy knows his stuff. But then I started watching more and it didn't make sense.
He sounds more like some kind of new age guru or a motivational speaker rather than someone with a good insight into the future.
He's probably in the position he is because he bows down to the CCP.
My thoughts exactly. Bowed down -- and then got too big for his britches maybe, and forgot who was actually in charge.
Well, maybe being under an oppressive regime makes him look dumber than he really is.
If you can't say certain things and have the obligation to say others...you could end up making no sense.
I feel the same about most pundits and billionaire "visionaries" touted today, to be honest. Including Elon.
I wonder if he just doesn't have a good enough grasp of the English language to articulate his ideas well enough. I would go as far to say that no self-made billionaire is stupid.
> I would go as far to say that no self-made billionaire is stupid.
Making money is far more about luck than skill. Always has been. Net worth is not a proxy for ability.
[edit] Don't get me wrong I'm not saying billionaires are idiots. I'm just saying that having a fat stack is not in and of itself a proxy for aptitude. Judge that on the person instead. Just judging them on their bank balance is an unnecessary appeal to authority that hasn't historically held.
I'd say normally it requires both, or extreme levels of either. Not sure normal rules apply under CCP though.
Not necessarily.You need to be smart, but not in the sense HN thinks.A charismatic, charming person can become quite wealthy if luck and connections help and still be very dumb by conventional standards. People like Kim Kardashian.
I'll raise you to extreme levels of both.
That may be the case for millionaires in the right place at the right time but not for the self-made billionaires.
I would still argue net worth is a unbiased (if you discount for corruption) proxy for ability (in the sense of ability to create wealth = products and services that people demand). It is extremely high variance though
your discount is everything if corruption is the most important part of the equation
From the article:
Ma, a former English teacher, is one of China’s internet pioneers, building an e-commerce empire with Alibaba and a fintech giant with Ant.
He would say exactly the same stuff in Chinese. He is just arrogant and abusive.
His grasp of English is pretty decent, he was a lecturer at Hangzhou Dianzi University in English and International trade.
Just looked at a bit of the linked video, and his English sounded fine, but at about, or even slightly below, my level. And I have no problems following English or making myself understood, but I will still never be able to express myself as clearly and as articulate as I am able to do in my native language. This is especially true when speaking.
Yep. As the article simply puts it, he was an English teacher.
>>_I would go as far to say that no self-made billionaire is stupid._
Stupid is a loaded word, but you can be a genius in chemistry and not be able to hold a "normal" conversation. You can also be homeless and super-smart.
This is interesting because I felt the exact opposite, seeing Musk babbling incoherent ideas and Ma with a clear vision of AI's future.
Can Ma even speak freely? I find it hard to judge a conversation when one of them is under incredible political pressure by a powerful regime that has no problem squashing him at any time.
Sure, but to be honest Elon Musk is neither a person worth listening regarding AI.
Agreed
The first comment made me laugh.
''He's not stupid. He just has a lot of Alibaba Intelligence.''
Jack Ma had said AI is Alibaba Intelligence
He is also a proponent of 996. Zero respect
For those unaware:
https://en.wikipedia.org/wiki/996_working_hour_system
https://www.cnn.com/2019/04/15/business/jack-ma-996-china/in...
Same for me - after seeing that I became convinced he's just some figurehead the CCP put there in what's ultimately a government funded/run business.
I wasn't surprised when they removed him.
I remember this one and I’m pretty certain he is not that stupid. Must have been political pressure. Maybe AI is/was taboo.
AI isn't/wasn't taboo there - the opposite, rather.
https://becominghuman.ai/china-aims-to-be-a-leader-in-ai-by-...
I wonder how different would the conversation feel if it was done in chinese not english.
I think that’s underselling Ma, who was an English teacher, graduated with an English degree and was an English lecturer at university.
He can do it with Zuckerberg. Pretty sure the result would be the same.
Stuff like this is why China will never be able to achieve its full potential.
I'm not saying they won't become successful, unfortunately it is only a matter of time until they eclipse the U.S. as the world's biggest economy (having 1.3 billion citizens and not having to waste money on R&D _wink wink_ tends to help also), however they are still holding themselves back and not managing to utilize their full potential.
I see this as China's advantage. The government is super flexible. There were 3k fintech p2p lending companies in last few years, because it is a new thing, the government don't know how to regulate it. Rather than waiting for regulation, it allows companies to run, and slowly put out regulation to fix problems. There are 15 fintech p2p lending companies now. The policy does not come out just for Ant, I am sure it has been for a few months at least in preparation. Ma definitely knew this is coming, that's why Ant is rushing to IPO now. In government, there might be people supporting relax regulation on finance industry, and people supporting more restrict regulation. Although I am sure Ant group's business is very profit, I don't really like how they push a credit card culture to young people. I would argue a loan is not something should be done in a few seconds, and that is not something you should be proud of.
Letting financial markets and lending spiral out of control just for the sake of having a mega IPO on public display to the world is a horrible idea. I actually see this move as a good sign that Chinese governance is still very functional. They're putting the health of the financial system ahead of their image as the new finance superstar, it would have been easy to just let it go through to show off China's financial independence.
Letting unregulated finance run rampart isn't a signal of achieving your full potential. It's a fairly new development maybe from the 80s onward.
The day the Chinese Communist Party falls is the day the US's global dominance will actually start to be threatened.
It is not. Spending fake news.
It is the last stand of him to fight against the authority that torture him fir 1 year and even take alibaba from him. Do not treat the victim as the killer. He was shouting before his dearth.
And if anyone was remotely believing that Chinese Party has nothing to do with their companies, this just hit the last nail on that belief. I'm looking at you Huwaei and your "we do not spy for Chinese Govt." statement from last year.
As a member of an EU country, that went full Huwaei in past years regarding 5G, I'm sad that we just gave to Chinese full control over us, technologically speaking.
How does this prove CCP has anything to do with ant? If that were the case wouldn't they want ant to ipo and reap in the capital?
> _How does this prove CCP has anything to do with ant?_
The Ant IPO has been hotly anticipated. This delay will cost many millions. The regulatory changes, billions.
That these were acceptable costs to reining in Ma over nothing more than public criticism speaks miles to the party’s cost-benefit mindset. For tangible gains it implies few hurdles to extreme consequences for noncompliance.
Probably, but they can let it IPO in a few months, after making some adjustments to the structure. They are in no rush.
But the change they are proposing significantly devalues the company
Governments wield huge power over private companies if or when they decide to take action. That's obviously very true in China, but that's also true in the West.
Just look at what happened to Huawei and Tiktok in the US/West, look at how Facebook is careful in order to prevent action against them, etc.
That's especially true in industries that are seen as strategic (telecommunications, energy, finance, etc). Companies know that and spend a lot of efforts on building and maintaining contacts within governments.
Ma, come to the USA! We'd love a guy like you.
Lol. Maybe he can elucidate his views on racial justice, I am sure it will be quite enlightening.