Return to caution for Chinese tech on the stock market

Posted on Apr 7, 2021, 11:06 AMUpdated Apr 7, 2021, 11:28 AM

Should this be seen as the backlash of the brutal suspension of the Ant Group’s IPO, of the more general takeover of tech giants by Beijing or the impact of the recent underperformance of the first stock market steps of the fintech Bairong? Five months after the setbacks of the financial arm of giant Alibaba, JD. com has, in turn, decided to cancel the marketing of its fintech branch. Formerly known as JD Finance and JD Digits before being renamed JD Technology, the subsidiary announced at the end of last week the withdrawal of its IPO application on the Star market, the “Chinese Nasdaq” of the Shanghai Stock Exchange. JD. com did not disclose the reasons for this withdrawal, but this decision did not surprise observers as the online finance industry is currently undergoing radical regulatory changes.

After allowing Fintech to develop for years away from strong regulations, Beijing is taking back control. In particular, the authorities want to better supervise online microcredit activities, whose rapid and poorly regulated growth in recent years poses increased risks to the stability of the Chinese financial system. Players are now urged to move towards business models closer to traditional banks, with much higher capital requirements.

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