Chinas Technology War Why Beijing Took Down Its Tech Giants Andrew Collier Full Chapter PDF

China’s Technology War: Why Beijing
Took Down Its Tech Giants Andrew

Collier
Visit to download the full and correct content document:
https://ebookmass.com/product/chinas-technology-war-why-beijing-took-down-its-tec
h-giants-andrew-collier/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...
Seeing the Unseen: Behind Chinese Tech Giants' Global

Venturing Guoli Chen
https://ebookmass.com/product/seeing-the-unseen-behind-chinese-
tech-giants-global-venturing-guoli-chen/
Brazil and the United States during World War II and

Its Aftermath: Negotiating Alliance and Balancing
Giants 1st ed. Edition Frank D. Mccann
https://ebookmass.com/product/brazil-and-the-united-states-
during-world-war-ii-and-its-aftermath-negotiating-alliance-and-
balancing-giants-1st-ed-edition-frank-d-mccann/
Dante John Took
https://ebookmass.com/product/dante-john-took/
Overreach: How China Derailed Its Peaceful Rise Susan

L. Shirk
https://ebookmass.com/product/overreach-how-china-derailed-its-
peaceful-rise-susan-l-shirk/
Overdoing Democracy: Why We Must Put Politics In Its
Place Robert B. Talisse
https://ebookmass.com/product/overdoing-democracy-why-we-must-
put-politics-in-its-place-robert-b-talisse/
Geography of Technology Transfer in China: A Glocal

Network Approach Liu
https://ebookmass.com/product/geography-of-technology-transfer-
in-china-a-glocal-network-approach-liu/
The New Cold War, China, and the Caribbean: Economic

Statecraft, China and Strategic Realignments Scott B.
Macdonald
https://ebookmass.com/product/the-new-cold-war-china-and-the-
caribbean-economic-statecraft-china-and-strategic-realignments-
scott-b-macdonald/
Yours for the Union: The Civil War Letters of John W.

Chase, First Massachusetts Light Artillery John S.
Collier
https://ebookmass.com/product/yours-for-the-union-the-civil-war-
letters-of-john-w-chase-first-massachusetts-light-artillery-john-
s-collier/
The Devil and All (1934) John Collier
https://ebookmass.com/product/the-devil-and-all-1934-john-
collier/
China’s Technology War
Why Beijing Took Down
Its Tech Giants
China’s Technology War
Andrew Collier
China’s Technology
War
Why Beijing Took Down Its Tech Giants
Andrew Collier
Pine Court
Pokfulam, Hong Kong
ISBN 978-981-19-3041-6 ISBN 978-981-19-3042-3 (eBook)

https://doi.org/10.1007/978-981-19-3042-3
© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
general use.
The publisher, the authors, and the editors are safe to assume that the advice and informa-
tion in this book are believed to be true and accurate at the date of publication. Neither
the publisher nor the authors or the editors give a warranty, expressed or implied, with
respect to the material contained herein or for any errors or omissions that may have been
made. The publisher remains neutral with regard to jurisdictional claims in published maps
and institutional affiliations.
Cover illustration: © Melisa Hasan
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore
189721, Singapore
I dedicate this book to my two children, Alex and Abigail.
I wish them the best of luck.
Preface
This book required an understanding of a number of areas, including

economics, finance, political science, history, and sociology, about which
I can only say I have deep experience in one or two. I must acknowl-
edge my debt to a number of other experts in various fields who were
instrumental in writing this book. These include my friend Kellee Tsai,
whose work in the field of political science has been an inspiration to
me; Andrew Sinclair, a rising star bridging the gap between finance and
political science, who was kind enough to sit down for lengthy discussions
about where China is heading; Ryan Manuel, an expert in Chinese politics
with a broad range of world experience; Matt Roberts, a longtime China
hand; and Eric Wong, a longtime friend and investor in New York who
is always insightful about China’s financial situation. I also would like to
thank my publisher Jacob Dreyer at Palgrave Macmillan, who has stuck
with me through three books, and the online group, Chinapol, whose
daily opinions (with both heat and light) have kept me sharp. And last,
to my wife, Kelley Loper, a passionate scholar whose dedication to the
discipline of academia gives me hope.
Pokfulam, Hong Kong Andrew Collier
vii
Contents
1 The Setting 1
2 Common Prosperity: Vision or Campaign? 11
3 The Bureaucracy Strikes Back 27
4 The Party and Common Prosperity 47
5 Can China Innovate Without the Platform Economy? 69
6 Xi Jinping’s End Game 87
Bibliography 105
Index 117
ix
CHAPTER 1
The Setting
Abstract This chapter outlines the beginning of the technology crack-

down with the speech by Jack Ma of Alibaba on October 24, 2020. It
then traces the reaction to the speech within the Chinese leadership and
the gradual rise of a series of measures restricting the growth of China’s
technology sector. It classifies the underlying motivations for the policy
shift according to economic and political rationales. Economically, the
platform economy was viewed as increasing the risk of financial insta-
bility, particularly regarding Ant Financial’s lending business. However,
more important, political control for the Communist Party is discussed as
the underlying reason for the government’s actions, many of which had
no economic rationale. Last, the chapter discusses Xi Jinping’s Common
Prosperity program to improve the distribution of income and why it is
likely to fail due to economic difficulties of implementation and structural
deficits in the Chinese economy.
Keyword Jack Ma · Alibaba · Common prosperity · IPO · Ant

financial · Party congress · Regulation · Data
© The Author(s), under exclusive license to Springer Nature 1

Singapore Pte Ltd. 2022
A. Collier, China’s Technology War,
https://doi.org/10.1007/978-981-19-3042-3_1
2 A. COLLIER
When Jack Ma, the billionaire founder of Chinese e-commerce company

Alibaba, gave a speech on October 24, 2020 to the country’s political and
financial elite, he was clearly unaware that his talk would be the catalyst
for a new era in China.
Jack started his speech with disarming words. “I am delighted to have
this opportunity to learn, discuss, and exchange ideas together with you.”
Dressed conservatively in a dark suit, blue checked tie, and white shirt,
he noted that his views could be considered “immature, incorrect, or
laughable” and added, “if they make no sense, just forget about them.”
But his main points were anything but forgettable. He attacked the
country’s leadership—many sitting in the room—for how they treated
innovation in the internet industry. “We are very good at management
but our supervision ability is sorely lacking,” he said. He added, “It is not
difficult to regulate. What’s difficult is to deliver regulation that achieves
the purpose of producing sustainable and healthy development.”
Jack, who also founded one of China’s most progressive online finan-
cial firms, Ant Group, said the financial regulators in Beijing were old,
out of touch with the modern internet, and slacking in their jobs. “We
cannot regulate the future with yesterday’s means,” Mr. Ma said. “There’s
no systemic financial risks in China because there’s no financial system in
China. The risks are a lack of systems…Today’s banks continue to have a
pawnshop mentality.” This model “is not going to support the financial
needs of the world’s development over the next 30 years.” Strong words
to the people in charge of that very system.
To some, Jack’s speech was simply a reflection of his no-nonsense
personality. “Jack is Jack. He just wanted to speak his mind,” said one
person who knows him (Zhai 2020). To the Communist Party, however,
it was a direct challenge to their rule. Xi Jinping and other senior leaders
who read the speech were “furious,” according to the Wall Street Journal
(Wei 2020).
Jack gave his speech to the Bund forum in Shanghai on a Friday. Just
a week later, the country’s most important financial regulators struck
back. Jack was summoned to Beijing for a meeting with the officials in
charge of China’s economy. These included government employees from
the People’s Bank of China (PBOC), the China Banking and Insurance
Regulatory Commission (CBIRC), the Securities Regulatory Commission
(CSRC) and the State Administration of Foreign Exchange (SAFE). After
the meeting, Ant’s corporate headquarters in Hangzhou responded with a
statement suggesting that the hurried corporate meeting was an ordinary
1 THE SETTING 3
regulatory chat. “Views regarding the health and stability of the finan-
cial sector were exchanged,” Ant said (Yang 2020). The government’s
bland summary said the parties “conducted regulatory interviews with
Ant Group’s actual controller Jack Ma, chairman Eric Jing, and chief
executive Simon Hu.”
But to outsiders, the peremptory summons to meet the regulators and
Beijing was ominous. Jack was in trouble. The next day, in a move that
shocked the world’s investors, the Shanghai Stock Exchange suspended
Ant’s $34 billion Shanghai listing—just a day before the launch. The Wall
Street Journal reported that Xi Jinping personally intervened (Wei 2020).
It was a clear sign that the world in which giant, privately held companies
could operate independently in China had forever changed. “The Party
has once again reminded all private entrepreneurs that no matter how rich
and successful you are it can pull the rug out from under your feet at any
time,” said one western observer (Bishop 2020).
The cancellation of the IPO of one of China’s most successful compa-
nies took observers by surprise. Few senior leaders would appreciate a
billionaire telling them in front of a public audience how to manage the
economy. But the reaction was excessive—canceling a billion-dollar IPO
just days before its launch because the chairman was a bit too outspoken
is not an appropriate reaction by any government. Something else was
afoot in Beijing.
The world soon discovered that Ant was just one chapter in a much
larger book. The crackdown on one company soon broadened to include
other technology firms. Over the succeeding months, the regulators in
Beijing imposed a series of draconian rules on Alibaba and other tech-
nology firms. Alibaba was fined $2.8 billion for monopolistic practices.
Didi Chuxing, the Chinese equivalent of Uber, was accused of going
public before completing a review by the country’s internet watchdog,
the Cybersecurity Administration of China (CAC). Didi was forced to
take down more than 25 applications from its online store, and remove
the “super-apps” that were the main interface for tens of millions of users,
badly harming its business (Caiping 2021). The app removal program
came four days after Didi’s US$4.4 billion initial public offering, one
of the biggest American stock market debuts of the past decade. With
the share price falling like a stone, chagrined American fund managers
launched a lawsuit accusing Didi of misleading investors. The online
gaming industry was the next target. Regulators summoned the top
gaming companies to a joint meeting with the CAC and the Ministry of
4 A. COLLIER
Culture and Tourism, which proceeded to impose restrictions on minors

in the gaming industry.
By late 2021, Alibaba had lost $378 billion of market capitalization,
and Tencent’s capitalization had fallen by $308 billion. China’s private
tutoring sector, that had been valued at $120 billion, fell sharply. The five
largest international luxury companies lost $67 billion in market value in
48 hours over worries about the future of China (Godemont September
2021).
The campaign moved beyond the technology companies. What at first
blush appeared to be a regulatory action against the platform economy
was expanded into a larger economic and cultural campaign. Some
analysts started warning that China was revisiting the Cultural Revolution
of 40 years earlier, when slogans dominated the airwaves, citizens had to
sing patriotic songs, and ideology trumped economics. That was an exag-
geration, but there definitely was an increasing focus on ideology. Shortly
after the technology crackdown began, Xi Jinping launched a set of new
policies under a populist theme called “Common Prosperity.” While short
on details, common prosperity promised to better the lives of the average
citizen by increasing their economic welfare. Among the laundry list of
proposals was a request to large private companies to donate money to
charity. Alibaba, Ant’s parent, promised to contribute US$15 billion to a
variety of charities. Tencent vowed to devote 50 billion yuan to common
prosperity programs. The chairman of food delivery firm Meituan agreed
to donate US$2.7 billion in shares to his personal charity. No billionaire
wished to be left behind in the race to convince the leadership that they
were eager to put their wealth behind the common cause of the people.
That October 24, 2020 talk has been billed as the speech that cost
Jack $37 billion and nearly killed an industry. The crackdown of the
technology sector spreads like flames in a dry forest, engulfing gaming,
education, and social issues like income equality for Chinese citizens.
People inside and outside of China were stunned by Beijing’s sharp about-
face toward one of its proudest offspring: the “platform” economy, the
range of companies that had created the world’s largest online transaction
economy. Almost three-quarters of China’s population shopped for goods
online and paid for them on their phones. The services that companies
like Alibaba, Ant Financial, Tencent, and others provided were as natural
to Chinese citizens as cars to Americans. An apparently minor spat had
ballooned into a challenge to the technology sector, along with a broader
1 THE SETTING 5
redefinition of cultural life in China. These companies had built reputa-

tions as global leaders but now the entire industry was under attack by
the regulatory state, by the institutions overseeing competition, banking,
cybersecurity, and culture.
A summary of actions taken against the technology industry includes
the following:
• Ride-hailing: CAC launched a cybersecurity review of Didi and

ordered Didi apps to be removed from app stores. Didi and eleven
other ride-hailing companies were summoned to Beijing to discuss
fair competition and data security.
• Food delivery: SAMR (State Administration for Market Regula-
tion) fined Meituan 3.4 billion yuan abusing its market dominance.
Meituan was accused of forcing merchants to sign exclusive agree-
ments.
• Education: China banned for-profit tutoring in core subjects.
Ministry of Education pledged to ensure the education sector
doesn’t interfere with children’s sleep.
• Gaming: China restricted minors to three hours of gaming per week.
Beijing summoned gaming companies and instructed them to ensure
fair competition.
• Finance: The State Council pledged to crackdown on illegal activ-
ities in the securities market and strengthen cross-border securities
regulation . PBOC banned all cryptocurrency activities. As part of
Ant Group’s mandatory restructuring, its virtual credit card service
Huabei announced integration into China’s central bank credit
reporting system and that it would share consumer credit data with
PBOC.
• Entertainment: Regulators pledged to conduct regular tax inspec-
tions of top actors’ pay. China announced it would ban songs with
illegal content from karaoke venues. Tencent was forced to give
up exclusive licensing rights with international record labels. China
also began to conduct regular tax investigations of top entertainers
including online influencers (Salidjanova 2021).
What was it about that speech that was a catalyst for officials in Beijing,
from Xi Jinping on down, to react so strongly?
6 A. COLLIER
The policy reaction was the result of two forces, one economic and
one political. On the economic side, there had been growing concern
that the platform companies were detrimental to China’s growth. They
were accumulating monopoly power at the expense of other companies
and were seen as excessively wealthy in a country that prides itself on
equality. For example, the People’s Daily said China’s goal was to “first
make the ‘cake’ bigger and better through the joint efforts of the people
of the whole country, and then divide the ‘cake’ well and distribute it well
through reasonable institutional arrangements.” (People’s Daily 2022).
The “divide” part of the equation was viewed as missing. In addition,
it was felt in Beijing that the dominant size of the platform companies
posed a risk to the stability of the financial system. All those transactions,
loans, and payments, were controlled by a handful of large companies and
were lightly regulated by the government. Regulators felt it was time to
step in more forcefully.
Many of the proposals that have been enacted had been long in the
making. The country’s antitrust system had been improving for several
years as concerns grew about the size of some of the platform compa-
nies like Alibaba and Tencent. In addition, China had been attempting to
foster the growth of its own home-grown technology for several decades,
and had been eager to reduce the power and influence of foreign capital
and technology, particularly from the United States. Many of these issues
came to a head.
However, there was more to this policy shift than simple regulation or
economics.
Politically, whether they had a regulatory function, all of the poli-
cies were designed to reinforce the power of the Communist Party
and the State. This occurred through several transmission methods. The
new policies would shrink the power of the platform economy, increase
government ownership or control of a number of economic functions,
and heighten the involvement of the Communist Party in the technology
sector and the lives of the Chinese people in general. The leadership was
clearly convinced that the Party is central to the future existence of the
Chinese State. The Party viewed the size, power, and large capital base
of the platform companies as a potential threat to the Party’s monopoly
dominance of political power. Jack Ma’s speech was a highly visible
symbol of this threat.
1 THE SETTING 7
The crackdown was also coming at an opportune time. At the 20th

National Party Congress in late 2022 Xi Jinping was seeking an unprece-
dented third and possibly permanent position as General Secretary of the
Communist Party. Many of the broader themes of the technology crack-
down, or in tandem with it, would be likely to increase his popularity
ahead of this crucial Party meeting. Widespread support from the general
public would help to solidify his claim to a permanent position as head of
the Party.
Even though there are some large themes stemming from the events of
2020, the difficulty of analyzing them is that there are a number of strands
that have been woven together at a single point in time. They have been
orchestrated by Xi Jinping but have a number of differing motivations and
historical precedents. We can summarize a number of key policy goals:
• Aggressive “regulatory catchup” by Beijing ministries in Beijing.

Agencies in Beijing whose authority had declined due to the rising
power of the technology sector were now emboldened to step up
their oversight.
• Achieve self-sufficiency in key technology. The years of the Trump
trade war, along with U.S. technology sanctions, confirmed a long-
standing conviction that China needed to develop as much of its
technology as it could. It was too dangerous to rely on the U.S. and
other nations for key components such as semiconductors. The rise
of platform companies, and their use of scarce resources, was not
viewed as helpful to achieve technological self-sufficiency.
• Reduce financial risk. This had been a top priority for the leader-
ship since the U.S. 2008 financial crisis. The American inability to
control its financial system and avoid the financial crisis convinced
the leadership in Beijing that they, too, needed to be on guard for
a similar fate in China. The platform companies were becoming key
players in online payments and lending. In the eyes of the leadership,
the private sector’s control of the heart of China’s financial system
had gone too far.
• Tighten control over online data. The platform companies were
beginning to assemble large batches of consumer data. This included
spending patterns, total wealth, and entertainment expenditure. This
was a huge advantage to these firms but also posed a threat to the
Party’s political control. For example, Didi Chuxing’s geospatial data
could track the location of senior officials. This was not acceptable.
8 A. COLLIER
• Rewrite the social contract with the Chinese people. No longer

would wealthy entrepreneurs be allowed to conduct business that
was antithetical to Party goals and immensely profitable to them-
selves. The powerful educational training and gaming firms would
be reduced in size or eliminated, and the “gig economy” that forced
workers to accept substandard wages would be heavily regulated
to avoid exploitation of cheap labor. The government would also
promote more equal distribution of income.
• Strengthen the control of the Communist Party. Although the
crashing prices of technology company shares came as a shock to
the world, the new regulatory structures were in line with the rising
tide of the power of the Party under Xi Jinping. Many of the
actions taken since 2020 suggest that the rise of the technology
entrepreneurs and the influence of their companies was viewed as
a threat to the Party. The future of the Party was at stake along with
the Chinese state itself.
The bigger question among many people was how far would this go?
Were these new policies a return to the dark days of the Cultural Revo-
lution when ideology ruled? Would China become completely isolated,
gradually retreating from the economic integration that it has pursued
for four decades? Was the tech crackdown a one-time action designed to
rein in a few unruly upstart capitalists? Or was it part of a long-range
plan to insert the political system even further into the heart of China’s
burgeoning capitalists? “Is this a new cultural revolution?,” a Bloomberg
columnist asked in an opinion piece (Brown 2021).
One of the main points of this book is to stress that, apart from
strengthening Party control and reducing the size of the platform
economy, these policies would not have much impact on China. That may
be a bold statement considering the precipitous fall in the market capi-
talization of the technology firms and the quick takedown of powerful
entrepreneurs like Jack Ma. But the fact remains that in general, the new
rules have done little more than tinker around the edges of China’s vast
political and economic system. For example, although it was trumpeted
as heralding a new age of equality, the “Common Prosperity” program
is likely to do very little to improve China’s highly unequal distribution
of income. That would require a far great effort through reform of the
state sector and China’s woefully inadequate tax system. The charity dona-
tions from large companies in line with Common Prosperity amount to
1 THE SETTING 9
a minuscule portion of average income. There has also been a renewed

focus on “hard” technology like semiconductors over “soft” technology
like Meituan food services. But these policies so far have failed to deliver
improvements in an industry that requires decades of growth. Experi-
ments with state support for the semiconductor industry have been dismal
failures due to the squandering of capital by inefficient governments and
state firms.
China confronts inexorable economic challenges that make achieving
success difficult with broad themes such as redistribution of income and
improving social welfare. These include a declining labor force, reduced
rural to urban migration, and declining economic growth. In addi-
tion, China has a crushing debt burden, an unstable tax system, and a
housing bubble. One of the main impediments is state control of much
of the economy. The continued advocacy of state controlled firms at the
expense of the private sector is inefficient and negative for GDP effi-
ciency and growth. China will not be able to tackle these problems simply
by attacking the platform economy and fomenting populist campaigns.
Beijing can fiddle at the margins but unless the government is willing to
engage in significant structural reforms these problems will not be solved.
There are, however, two areas that appear to be more permanent
features of the current policies. One is the state of U.S.–China rela-
tions. There is likely to be continued financial separation between the two
countries, including political and economic sanctions, and some limits on
mutual capital raising. These trends are likely to continue. However, many
of these issues are a function of geopolitical considerations and have less to
do with the technology crackdown itself. In addition, the continued flow
of capital invested into China, flourishing trade, and China’s demand for
foreign technology, raises questions about how severe this juncture will
be.
The second exception is the strength of the Communist Party over
China’s political system. All of these programs—whatever their actual
or perceived benefits—ultimately strengthen the Party. From the Beijing
headquarters in the closeted center of power at Zhongnanhai, down to
the corporations, government officials, and citizens below, the new order
reinforces the effectiveness of Party mandates. Xi Jinping was highly moti-
vated to engineer Common Prosperity and the technology crackdown by
perceived threats to the Party’s dominance. This is a trend in existence
since Xi took power in 2012 that has been heightened by the technology
crackdown.
10 A. COLLIER
The larger issue is that the challenges of running an economy that

many believe has already passed its peak growth period, relying on an
unprecedented increase in debt, is going to restrict Beijing’s options.
The political hardening since 2020 may have been a determined effort
by the leadership to steer the conversation away from slowing growth
toward socially accepted goals. Ideology may have to replace what polit-
ical scientists call “performance based legitimacy” (Thurston 2021). “One
interpretation can be that Xi Jinping is moving further into a strategy of
increasing control over the economy, behaving as if there was a threat for
the system and for the party, even though the indications we have don’t
point in the direction of there being a threat,” said Pascal Lamy, former
director general of the WTO (Hancock 2021).
The technology crackdown is part of a larger political canvas. It is
important to understand its power and limitations.
References
Bishop, Bill. Quoted in Guo, Lily. Jack Ma Is Tamed: How Beijing Showed Tech
Entrepreneur Who Is Boss. November 4, 2020. The Guardian.
Brown, Malcolm. Could China’s Crackdown be Another Cultural Revolution.
September 4, 2021. Bloomberg News.
Caiping, Liu. The Ministry of Transport Threatened a Review of the Company
in Tandem with the CAC. July 6, 2021. SCMP.
Godemont, Francois. Killing Several Birds With One Stone: China’s New Digital
Policies. July 26, 2021. Institut Montaigne.
Hancock, Tom. Tech Crackdown Is a Cloud Over China Economy, ex-WTO
Chief Says. September 7, 2021. Techexplore.
People’s Daily. Correctly Understand and Grasp the Strategic Goals and Practical
Ways to Achieve common prosperity (people’s point of view). , February 7,
2022.
Salidjanova, Nargiza. China Pathfinder: Quarter 3 2021 Update. November
2021. Atlantic Council, Geoeconomics Center and Rhodium Group.
Thurston, Anne. Engaging China. 2021. Columbia University Press. Location
1625, Kindle edition.
Wei, Lingling. China’s President Xi Jinping Personally Scuttled Jack Ma’s Ant
IPO. November 12, 2020. Wall Street Journal.
Yang, Jing. Chinese Regulators Summon Ant Leaders Ahead of Gigantic IPO.
November 2, 2020. Wall Street Journal.
Zhai, Keith. How Billionaire Jack Ma Fell to Earth and took Ant’s mega IPO
with him. November 6, 2020. Reuters.
CHAPTER 2
Common Prosperity: Vision or Campaign?
Abstract Common Prosperity was the social program that was a twin to
the policies restricting the growth of the platform companies. It was a
“soft” slogan that would corral a collection of policies around a common
theme, one that would appeal to both the government bureaucracy and
the ordinary Chinese citizen. However, it was widely perceived as having
a historical relationship to the Cultural Revolution when ideology domi-
nated private life. This chapter discusses the historical roots of common
prosperity, its political function as a populist campaign for Xi Jinping, and
why it was unlikely to have much of an impact on the lives of Chinese
citizens. However, precisely because it is relatively costless and relies on
the power of the Party for implementation it is likely to continue for the
foreseeable future.
Keywords Distribution of income · Communist Party · Wang Huning ·

Jiang Zemin · Great Leap Forward · Cultural Revolution · Han Wenxiu ·
Xi Jinping · Charity · Platform economy
If the cancellation of the Didi Chuxing IPO was the cutting edge of the
Communist Party’s sword, “Common Prosperity” was designed to be the
blunt end; a “soft” slogan that would corral a collection of policies around
a common theme, one that would appeal to both to the government

https://doi.org/10.1007/978-981-19-3042-3_2
12 A. COLLIER
bureaucracy and the ordinary Chinese citizen. However, the term had a
dual meaning. It could be viewed as a cheerful phrase calling for greater
equality for all Chinese citizens under a government determined to assist
the common man. Or, more nefariously, it could be seen as a vague
catchphrase harkening back to the unstable era of the Cultural Revolu-
tion when ideology dominated political life. What exactly was common
prosperity? Was it a new era for China, a return to the past, or merely an
ad campaign?
The phrase “common prosperity” first appeared in the People’s Daily
on September 25, 1953, when the paper published a list of 65 slogans
honoring the fourth anniversary of the founding of the People’s Republic
of China (Bandursky 2021). Subsequent uses of the term referred to a
choice between capitalism and socialism—and Common Prosperity was
key to the success of the latter. It was aimed primarily at China’s peasants
and was a call for common ownership and use of the land to achieve
economic success. Starting in 1979 after former leader Deng Xiaoping
asked the Chinese people to “get rich first,” the phrase fell out of favor. It
was still referred to by the ideologically pure who were worried about the
adverse impact of Deng’s capitalist policies in what had been a communal
society. However, within the mainstream, the idea was as people became
rich they would enjoy the fruits of Common Prosperity.
While Common Prosperity ideally could benefit the average citizen,
it was also tied to the strengthening of the Party that Xi Jinping holds
so dear. One thread running through his policies is a belief that many
of the liberties, and cultural freedoms, that come with wealth in a
consumer-driven society threaten the Party’s stability and control. “What
is important about culture is that it allows political systems to harness
social energy and use that energy for the good of the national interest for
building a more economically dynamic society,” said Matthew Johnson,
an independent scholar of modern China (Johnson 2021). Anthony
Saich, a professor of international affairs at the Harvard Kennedy School,
said Xi’s politics in general “fuses with … key elements of Communist
Party practice historically,” including “a deep strain of paternalism.” The
party, he said, “sees itself as the moral arbiter of state and society.”
(Shulman 2021).
Many point to the influence on Xi of the Party’s intellectual eminence
grise: Wang Huning. Wang is a member of the Politburo Standing
Committee and is widely known as the Party’s ideology czar. He is Xi’s
intellectual braintrust. Wang is also a survivor, as he played a similar role
2 COMMON PROSPERITY: VISION OR CAMPAIGN? 13
under former leaders Jiang Zemin (with his policy of “three represents”)
and Hu Jintao (“scientific outlook on development). After visiting the
U.S., in 1992 Wang published a book, “America Against America,” that
included a number of statements in favor of the American economy and
the workforce. But he’s also an orthodox Marxist with a strong moral
streak.
The moralism reflects Xi Jinping’s own background. Xi had had his
mettle tested through difficult years in the countryside as a youth “sent
down” during the Cultural Revolution to live with the peasants. His
father, revolutionary veteran Xi Zhongxun, was purged in 1962 for
betraying the Party. In Shaanxi Province in 1969, Xi lived in a cave
plagued by fleas, labored in the fields with the farmers, pulling coal and
picking up manure for heat (Ou 2016). By all accounts this period hard-
ened him into a revolutionary who believed in the moral greatness of
the Communist Party. This is a trait shared by other leaders. University
of Glasgow scholar Holly Snape notes the frequent desire among Chinese
leaders, starting with Mao, to create a “new Chinese man” who embodies
Party values. This drastic reshaping of Chinese citizens had fallen out of
favor until Xi Jinping rose to power (Snape 2021).
However, to some degree, Xi Jinping’s character, and the technology
crackdown, reflected longstanding attitudes within China. The opening to
the west, initiated by Deng Xiaoping and solidified by China’s 2001 entry
into the World Trade Organization, may have fooled westerns that China
was becoming a liberal democracy “just like us.” But the hardening of the
political arteries was sitting below the surface. Economist Barry Naughton
has noted that western observers “got it wrong” understanding China’s
politics. “We were far too slow to understand the policy changes that
took place after 2003 as China entered the global economy” (Naughton
2021a).
Xi’s revival of the term “Common Prosperity” very much reflected the
mindset of building a “new Chinese man” who would embody values that
would strengthen both the Communist Party and the Chinese state. But
there was debate about how China would go about educating its citizens.
Wang Dan, a famous Chinese dissident who was one of the leaders during
the protests at Tiananmen Square in 1989, was convinced that Common
Prosperity under Xi Jinping was a return to Maoist campaigns. “The idea
of common prosperity is purely utopian…it may lead to another Great
Leap Forward,” he told Radio Free Asia. That was a disastrous 1958
14 A. COLLIER
campaign to promote economic growth through backyard steel furnaces

and ideological fervor (Lam 2021a).
Hearing the comments within China about Common Prosperity, the
foreign press spoke of the return of ideology over economic prag-
matism. One story in the Indian publication, The Wire, noted: “Will
China’s ‘Common Prosperity’ Project Turn Out to Be a Case of ‘Cure
Worse Than Disease’? China has recently rolled out several measures
that cracked down on businesses with an aim to redistribute wealth and
reduce inequality. Many are likening this to the Cultural Revolution of
the 1960s” (Joshi 2021).
There were some signs that this “pure” form of Marxism was staging a
comeback within China. In September 2021, a little known blogger from
remote Hubei Province posted a chat about Common Prosperity that
caught the attention of China’s online community because of its ideolog-
ically hard-line tone. The blogger, who went by the name Li Guangman,
called Common Prosperity a “revolution.” “The series of rectification
moves tells us that China is undergoing a profound transformation in
the area of economy, finance, culture and politics,” Li wrote. “Or we can
say that it’s a profound revolution,” he wrote. Li Guangman’s comments
were defiantly from the ideological hard left. “The capital markets will no
longer become a paradise for capitalists to get rich overnight, the cultural
market will no longer become a paradise for sissy stars, news and public
opinion will no longer become a place to worship Western culture, red
will return, heroes will return, and blood return,” he wrote in a famous
blog post (Li Guangman 2021).
However, he was also attacked by some of the country’s largest media
for being “misleading” and “exaggerated.” There was a lot of nervousness
within China about anything that smacked of the Cultural Revolution
(Mai et al. 2021). Many within China—even within the government—
pushed back on the idea that Common Prosperity was a return to
the difficult days of the Cultural Revolution. Getting rich first was still
accepted under Xi Jinping. Han Wenxiu, executive deputy director of the
General Office of the Central Financial and Economic Affairs Commis-
sion, a unit of the Central Committee of the Politburo, came to the
defense of Chinese capitalism at a briefing in Beijing held by the Central
Propaganda Department. “[We] must encourage hard work to get rich,
entrepreneurship and innovation to get rich, and permit some people
to get rich first, and after getting rich helping others to grow richer.
[We] will not ‘kill the rich to help the poor.’” (Quoted in Bandursky
2021). One important liberal economist, Zhang Weiying, also launched a

passionate defense of the market economy:
“China’s future development depends on our beliefs, what we believe,
what we don’t believe. If we strengthen our confidence in the market
economy and constantly promote market-oriented reforms, China will
move towards common prosperity. If we lose our faith in the market and
introduce more and more government intervention, China can only move
towards common poverty. Don’t forget that the planned economy was
intended to benefit the poor, but as a result, more and more poor people
were created, making the fate of the poor more tragic than in the past”
(Zhang Weiying 2021).
These comments, particularly from Han Wenxiu at the Central Propa-
ganda Department—unless they were disingenuous—suggest that talk
of a leftist ideological shift under Common Prosperity was not accu-
rate. Xi’s Common Prosperity appeared a lot more mild. Maya Wang,
a senior researcher with Human Rights Watch, summed up Xi’s new
campaign this way: Xi Jinping “vows to achieve ‘common prosperity’ by
reining in private capital, redistributing wealth to the people, clamping
down on social ills ranging from ill-gotten gains to the wrong form
of entertainment, while also promoting traditional moral values” (Wang
2021).
A speech by Xi Jinping provides some clues to the direction of the
campaign. At the tenth meeting of the Central Finance and Economic
Commission on August 17, 2021, and a month later published in the
official Party organ, Qiushi (Seeking Truth), Xi fleshed out his thoughts.
Written in the soft “pablumesque” style that the Communist Party tends
to deploy, it almost reads like the political platform of a European polit-
ical party. “What we call common prosperity is the common prosperity
of all people, the material and spiritual life of the people, not the wealth
of a few people, nor is it homogeneous egalitarianism,” Xi noted. Who
would disagree? However, Xi’s statements also suggested that Common
Prosperity was not just an empty slogan, but a guide to political action
under the Party banner. “Achieving common prosperity is not only an
economic issue, but also a major political issue related to the basis of the
Party’s governance,” Xi noted. “We must not allow the gap between rich
and poor to widen, the poor and the rich, and never allow an insurmount-
able gap between the rich and the poor.” In these phrases, some analysts
saw the hand of Wang Huning.
16 A. COLLIER
Xi’s speech covered quite a bit of ground, leaving room for a variety
of interpretations. He said the policies to be pursued under Common
Prosperity included:
• Improve distribution of income. and make society more fair for rural
and urban workers.
• Maintain the priority of public ownership of the economy as the
“main body.”
• Encourage workers to get rich and act “according to your abil-
ity” (which sounds a lot like the free-market economist Milton
Friedman).
• Expand the middle class.
• Promote economic improvements in less developed parts of China.
(Xi 2021b)
One of the most important sections—in light of the furor over the
strict regulation of the technology sector—concerned the fate of private
industry. Was the cancellation of the Didi IPO and other regulations the
end of the private economy? Xi’s speech was surprisingly encouraging. “It
is necessary to improve the business environment, reduce the tax burden,
provide more market-oriented financial services, and help them operate
steadily and continuously increase their income,” Xi noted. But he did
call for opposing the “disorderly expansion of capital” and “strengthen
anti-monopoly supervision.”
In a statement on Common Prosperity issued by the Xinhua News
Agency following an August 17, 2021 meeting of the Central Finance
and Economics Commission chaired by Xi, a couple of additional points
leapt out:
• “Financial Risk” was mentioned 14 times, not much less than

Common Prosperity at 17. This was a surprisingly high number of
mentions in a document addressing inequality. Clearly, financial risk
was a top priority for the leadership.
• The statement affirmed the importance of public ownership and the
development of “multiple ownership,” a term that refers to joint
ownership by the state and the private sector. This may have been a
nod to the private sector to avoid suggestions that China intended
to kill the private economy.
• The key paragraph was this: “We must clean up and standardize
unreasonable income, rectify the order of income distribution, and
resolutely ban illegal income.” (Xinhua News, August 2021).
Much of Common Prosperity falls in line with Xi’s longstanding

view that economic development is part of a broader set of cultural
and political issues. The roots of this lie in his work decades ago as a
fledgling developmental economist. In September 2001, when he was the
governor of Fujian province, Xi Jinping published an article on develop-
ment economics in the journal of the Fujian Academy of Social Sciences.
The article was a sharp critique of the western mode of capitalism and
an endorsement of Xi’s view of Socialism. Common Prosperity should be
seen as one strand of a larger structure:
“Economic development cannot be simply equated with industrial-
ization and the growth of gross national product or national income:
economic development is not equivalent to economic growth, but
includes economic growth.…Economic development refers to a level of
social development, that is, a process of economic growth that is accompa-
nied by changes in economic structure, society and the political system. It
includes growth in output, changes in the structure of output and income,
and change and development of economic conditions, political conditions
and cultural conditions” (Quoted in Batson 2019).
Given the ideological backdrop, what then was the meat and pota-
toes of Common Prosperity? The broad theme was a softening of the
harsh edges of Chinese life under the Communist Party, a populist order
to make life easier for the average citizen. This included attacks on the
flaunting of wealth by the very rich, including some of China’s most
famous actors and actresses. There was a moral element to this in Xi’s
“attention to ‘morality’” inside and outside the Party (Snape 2021).
But the main focus of Common Prosperity was to reduce the economic
inequality that Xi clearly felt could destabilize the Communist Party. The
huge wealth held by the rich entrepreneurs like Jack Ma of Alibaba and
Tony Ma of Tencent were easy targets for a campaign against an unequal
society.
Although decades of rapid economic growth helped to lift three-
quarters of a million people out of extreme hardship, close to 17% of the
population still lived in poverty, higher than most major middle-income
countries. Over the past several decades, the gap between the richest
and poorest urban households in terms of disposable income has hardly
18 A. COLLIER
narrowed. The Gini-coefficient, one widely used measure of inequality,

widened to 70.4 in 2020 from 59.9 in 2000. In rural areas, it has widened
even more (China Power Project 2021). The top 1% owned less than 8%
of income in the 1980s but by 2005 climbed to a peak of around 16%
before declining marginally to 15% (Merler 2018).
Housing, while supporting China’s economic growth and providing
a savings safety net in a country with an unreliable stock market,
was becoming extremely expensive for many people. Starting in 2002,
housing prices in China’s largest, wealthiest cities rose sixfold, far
exceeding the 80% growth in national housing prices in the U.S. between
2000 and 2005, or the doubling of house prices in Ireland during their
booms (Rogoff 2020). Nonetheless, inequality in China actually peaked
in 2008—more than a decade earlier (Milanovic 2021).
The government kept up the messaging that it was intent on improving
distribution of income. In early 2022, Chang Tiewei, deputy director of
the Department of Employment, Income Distribution and Consumption
at the country’s planning board, the National Development and Reform
Commission (NDRC), said the government would promote “narrowing
gaps between different regions, between urban and rural areas as well as
the rich and the poor” (Shijia 2022).
But while the messaging on the surface appeared coherent, much of
Xi’s Common Prosperity program devolved into a series of random—
if popular—attacks on easy targets. It’s a lot easier to shoot a sitting
duck rather than chase a goose in the wild. Making fundamental reforms
is difficult. As one analyst put it, “There is thus something of a
mismatch between common prosperity’s very broad political goals and the
constrained policy instruments available to achieve them” (Batson 2022).
Certainly, since 2012 inequality has not improved under Xi Jinping’s
rule. The recent history under Xi shows a decline in equality of income
across China. And this is partly a result of specific policies ordered by the
government that have been moving in the opposite direction from the
government’s rhetoric. I will discuss this issue in more detail in a section
on the economy, but to take one example, inequality often is a function of
geography. This is clear in the distribution of total social financing, which
includes bank loans, bonds, and other forms of credit. Over the past
decade, the poorer provinces like Liaoning and Heilongjiang have seen
a drastic drop in their share of credit allocation while rich provinces like
Jiangsu have seen huge increases. Beijing (and the banks) have provided
credit where the economy was generating growth—not necessarily where

the people were the most poor.
In addition, since Xi Jinping took power in 2012, Beijing has slowly
been reducing its contribution to local provincial tax revenue, which
provide the majority of social services. The central government’s share of
total government spending slipped from 14.8% in 2018, to 14.7% in 2019
and 14.3% in 2020. Beijing’s tax redistribution policies have favored the
better-off provinces and reduced redistribution to poorer regions. Much
of the problem has been caused by Beijing’s refusal to cede budgetary
power to provincial governments. This could reflect a number of factors,
including economic growth, Xi Jinping’s preference to centralize control,
or concerns about local corruption. Fiscal reforms in 2018 failed to
change this arrangement. “Given that the central government increasingly
sets national standards for service provision, and with three-quarters of all
transfers in China set on a discretionary basis, the narrow scope of the
2018 reform signals the central government’s reluctance to cede finan-
cial control.” (Wong 2021). We will discuss the difficulties of achieving a
more equal society in the section on the economy.
As Harvard sociologist Martin Whyte pointed out about Xi’s overall
economic program:
In sum, Xi Jinping can be credited with continuing to focus on the
problems of rural poverty in China and making further headway in
an already impressive record of accomplishment under his predecessors,
mainly resulting from China’s booming economy. But despite the atten-
tion his pledge has received, there is little that is particularly new or
different on this front since Xi Jinping took charge beyond increased
funding and administrative effort (Whyte 2022).
The main program under the Common Prosperity banner has consisted
of orders to the technology companies to contribute to charity. Shortly
after an August 17, 2021 speech by Xi Jinping, the leaders of the largest
platform companies were forced to prove their allegiance by pledging vast
sums of money. This was an easy way to appear to redistribute wealth—
without making any fundamental changes to the broader distribution of
income. Online food supplier Pinduoduo and Alibaba announced char-
itable donations that together totaled 160 billion yuan, around US$25
billion. In April 2021, Tencent said it would invest 50 billion yuan to
help develop Common Prosperity. This included 200 million yuan to
subsidize 1,000 public welfare personnel, and fund 100 public welfare
20 A. COLLIER
digital projects; train 1 million rural governance and agricultural officials;

and 1 billion yuan for a scientific award (Sina 2021).
But this wasn’t a reorganization of the economy. It was a marketing
campaign. “The scary part [for donors] is that they don’t know how
much is enough,” an executive of a big Beijing charity told the Finan-
cial Times. “All they can do is look at how much their peers have given
and try to match it” (White et al. 2021). Some were skeptical. China
analyst Anne Stevenson Yang called the charity program a giant cesspool
of corruption. “This sounds like it’s about correcting massive wealth gaps
and giving more to the countryside. It’s actually a giant pork barrel for Xi
supporters” (Yang 2021). She believed the large corporate contributions
were going directly into the pockets of government officials, although this
was difficult to prove. If the funds were directed to state organizations,
as it appeared they were, this was a further attack on the private sector.
“That’s consistent with the broader trend under Xi Jinping of reducing
the influence of civil society. The party is extremely uncomfortable with
independent public behaviour that provides public goods or holds the
state accountable,” said Scott Kennedy, a China expert at the Center for
Strategic and International Studies in Washington (White et al. 2021).
The charity giving by large corporations was a response to a tech-
nical sounding policy called Tertiary Distribution. The term had floated
around in Beijing government documents for decades but had never been
taken seriously. Now, the Party defined several key elements of a “ter-
tiary distribution mechanism.” While primary distribution allocates wealth
according to the Marxist principles of labor, capital and other factors,
and secondary distribution was redistribution of wealth through tax and
other means familiar to the west, tertiary distribution basically consisted
of charitable donations by wealthy individuals and corporations. However,
as noble as the campaign appeared, charitable donations were not going
to make much of a dent in wealth distribution (USCESCR 2021c). In
2014, charitable donations as a percentage of China’s GDP was only
0.1%, compared to two percent in the U.S. Chinese charity was about
one-hundredth of what Americans donated per person (Cunningham
2016).
Meanwhile, the attacks on popular culture continued to increase. Late
in 2021, Xi Jinping spoke against the rise of male entertainers who did
not conform to his vision of the Chinese man. The state press claimed
there was a “masculinity crisis” that was corrupting a generation of young
people. A television show similar to American Idol was banned because
the men looked too effeminate. Soon, music stars were altering their rene-
gade images by taking off ear rings and other feminine adornment in favor
of baggy jeans. The Hong Kong newspaper South China Morning Post
said a crackdown on celebrity culture would “protect consumer rights
and rein in an unruly multibillion-dollar fan industry prone to fraud, tax
avoidance and doxxing” (Nulimaimaiti 2022).
During a symposium on professional ethics, the Party group secretary
of the China Federation of Literary and Art Circles noted:
“For some time now, the entertainment industry — of which practi-
tioners in literature and the arts is an important component — has seen
some chaos. We have seen the disorderly development of capital in the
entertainment industry, the lack of responsibility from media platforms,
and the lack of rigor in industry and market supervision. We have also
seen a very small number of celebrity actors constantly breaking through
the bottom line of social morality and the red line of national law with
bad behaviour, including charging sky-high fees for appearance in films,
tax evasion, pornography and drugs, false endorsements, and other moral
misconducts and deplorable practices. These have triggered a high degree
of social and public concern, strong criticism, and affected the literature
and arts world in an extremely negative way” (Quoted in Ni 2021a).
Apart from a political drive to create a new kind of citizen, the cultural
campaigns had the added advantage of distracting attention from China’s
problems—particularly the economy. Attacking “unorthodox masculin-
ity” shifted the focus from the country’s slowing economic growth, the
Party’s failure to address the growing inequality in society, including
a lack of upward mobility, dismal career opportunities, and expensive
housing. After all, many of these cross-dressing figures were well known
pop stars and were easy targets for illustrating the extremes of Chinese
society (Gao 2021).
The platform economy was also considered part of the cultural
problem. The gaming industry, in particular, was accused of harming chil-
dren’s education by seducing them into playing games for hours instead of
studying. As a result, on August 30, 2021, the government instituted stiff
new regulations on the entire gaming industry. These included requiring
verification of registered names, and limiting people to just one hour
of gaming on weekends and holidays and none at all during the week.
These rules were highly difficult to enforce and were, of course, wildly
unpopular among China’s millions of young gamers.
22 A. COLLIER
More seriously, for parents desperate to get their children into China’s
highly competitive schools, the government told the large tutoring
industry that they could no longer offer classes on weekends or during
summer and winter breaks. The logic of this draconian cutback on the
tutoring industry was that huge sums of money and endless hours were
devoted to the desperate effort to obtain a coveted slot at a top school.
China’s vaunted “gaokao” entrance exam was highly competitive. As in
other countries such as the U.S., the benefits of entry into a top school
were significant. However, Beijing felt that the tutoring industry was an
excessive use of valuable time and money that could be better spent on
more valuable contributions to society as a whole.
Permits for the opening of new schools were halted and education
companies, which had raised billions of dollars on the Nasdaq, were
forbidden from raising capital through public listings. Publicly listed busi-
nesses had to re-register as non-profits. One company, Dashan Education,
said it would close nearly half of its 102 tutoring locations. Aside from the
disastrous impact on the share prices of the listed companies, parents were
outraged that their one avenue to help their children score well on the
exams had been blocked. Overnight, a “shadow industry” of tutors sprang
up, arranging private tutoring in secret locations, as desperate parents
sought to get their children into competitive universities (Fan 2022). By
some estimates, more than 3 million jobs tied to the education industry
were under threat (Shin 2021).
As with distribution of income, in all the attacks on the tutors and the
educational system, there was no discussion of reforming the decades-old
system of granting education and other benefits tied to one’s birth-
place, or hukou (individual household). That policy has forced millions of
migrants to leave their agricultural homeland for a better paying industrial
job in the cities—without gaining access to schools, housing, or medical
benefits because they had no residency permit. The system suited China
well when low-cost labor was its primary advantage. But moving up the
value chain means that China needs to better educate its workforce. In
2015, only 30% of the labor force had any high schooling, compared
with 31% in Indonesia, 34% in Mexico, 36% in Turkey, 42% in Argentina,
and 46% in Brazil, also compared with 76% in OECD countries (Whyte
2019). Thus, once again, the actual policies of Common Prosperity failed
to do more than simply tinker around the edges of fundamental reform.
The theme of Common Prosperity also came to include a broader
refashioning of the character of the Chinese people. Whether these
programs were directly under the Common Prosperity umbrella or coin-

cident is not clear, but the trend was moving in the same direction. For
example, in 2021 the government began establishing “New Era Civi-
lization Practice Centers” in towns all across the country. These centers
coordinate social services, host cultural activities, and not surprisingly,
promote Xi Jinping thought. They also act as a kind of local “slush fund”
to invest in local government operations. According to one investigation,
more than 300 New Era Centers spent as much as 700 million yuan on
everything from new cultural buildings to air conditioning. These were
not labeled as Common Prosperity programs but were clearly in the same
spirit (Batke 2022).
Although the Common Prosperity theme was broadening in scope, it
was still far apart in tone, implementation, and impact from the earlier
mass campaigns under Mao’s rule. The Cultural Revolution was an ideo-
logical, political, and economic battle on a vast scale that permeated every
corner of daily life. In contrast, Common Prosperity has targeted certain
parts of China that the State viewed as either morally excessive, favoring
the rich, or a waste of money (such as video gaming). Coming ahead of
the 20th Party Congress when Xi Jinping was seeking an unprecedented
third term, it was also a populist plea for support, based on Xi’s moral-
istic outlook, among China’s working stiffs. As China analyst Adam Ni
noted, Common Prosperity “is driven by the Party-state’s aim to reinforce
control and legitimacy by presenting itself as the guardian and exemplar
of the Chinese moral order” (Ni 2021a).
Precisely because it is relatively costless and relies on the power of the
Party for implementation it is likely to continue for the foreseeable future.
Organizing local community groups, and getting local Party cadres on
board with ideological campaigns, is relatively easy for the Party. It is
doubtful, though, that it will have much impact on the economy or
the fundamental roots of society because it lacks teeth and institutional
structure.
References
Bandursky, David. A History of Common Prosperity. August 27, 2021. China
Media Project.
Batke, Jessica. A Vast Network of ‘New Era Civilization Practice Centers’
Is Beijing’s Latest Bid to Reclaim Hearts and Minds. January 31, 2022.
Chinafile.com
24 A. COLLIER
Batson, Andrew. What Xi Jinping Thinks About Development Economics.

December 13, 2019. Andrewbatson.com.
Batson, Andrew. What Happened to Common Prosperity? March 7, 2022.
andrewbatson.com.
China Power Project. Is China Succeeding at Eradicating Poverty? https://chi
napower.csis.org/poverty/. Accessed November 5, 2021.
Cunningham, Edward. Harvard Kennedy School Ash Center for Democratic
Governance and Innovation, China’s Most Generous. 2015, 2016, 2018.
Fan, Wenxin. China’s War on ‘Shadow Education’ Leaves Parents in Distress.
January 14, 2022. Wall Street Journal.
Gao, Helen. China’s Ban on ‘Sissy Men’ Is Bound to Backfire. December 31,
2021. New York Times.
Johnson, Matthew. The Worldview of Wang Huning, the Party’s Leading
Theoretician. November 4, 2021. Sinica Podcast.
Joshi, Manoj. Will China’s ‘Common Prosperity’ Project Turn Out to Be a Case
of ‘Cure Worse Than Disease’? September 13, 2021. The Wire English.
Lam (a), Willy Wo Lap. Implications Of Xi’s Revival of Maoist Slogan ‘Common
Prosperity’—Analysis. August 29, 2021. Jamestown Foundation.
Lam (b), Willy Wo Lap. Early Warning Brief: Factional Strife Intensifies as Xi
Strives to Consolidate Power. October 14, 2021. Jamestown Foundation.
Lam (c) Willy Wo Lap. 100 Years of the Communist Party: Xi Jinping Equal to
Mao, Almost a God. May 21, 2021. Pime Asia News.
Li, Guangman. Everyone Can Feel That a Profound Change Is Under Way!
August 29, 2021. Xinhuanet. http://www.xinhuanet.com/politics/2021-08/
29/c_1127807097.htm.
Mai et al. Viral Blogger Hailed China’s ‘Profound Revolution’, But the State
May Disagree. September 3, 2021. SCMP.
Merler, Sylvia. Inequality in China. September 24, 2018. Breugel Institute.
Milanovic, Branko. China’s Inequality Will Lead it to a Stark Choice. February
11, 2021. Foreign Affairs.
Naughton (a), Barry. A Perspective on Chinese Economics. What Have We
Learned? What Have We Failed to Appreciate? July 2021. In Engaging China,
edited by Anne Thurston. Columbia University Press.
Naughton (b), Barry. Six Factors behind China’s Shift to “Grand Steerage.” In
Chinese State Capitalism: Diagnosis and Prognosis. October 2021. CSIS.
Ni (a), Adam. Rectifying China’s Entertainment Sector. September 16, 2021.
China Neican.
Ni (b), Adam. To Firmly Drive Common Prosperity. October 18, 2021. China
Neican.
Nulimaimaiti, Mia. China’s Fan Club Crackdown a ‘Turning Point’ for
Multibillion-Dollar Industry Prone to Fraud, Tax Avoidance and Doxxing.
January 15, 2022. SCMP.
Ou, Jason. President Xi Jinping and Other Sent-Down Youths Who are Now Big
Names in China. November 26, 2016. The Straits Times.
Rogoff et al. Peak China Housing. August 2020. Working paper, NBER.
Shijia, Ouyang. NDRC to Promote Common Prosperity. February 18, 2022.
China Daily.
Shin, Watanabe. China’s Tutoring Crackdown Puts over 3 Million Jobs at Risk.
November 3, 2021. Nikkei Asia.
Shulman, Michael. Xi Jinping’s Terrifying New China. November 15, 2021.
Atlantic Magazine.
Sina Finance. Invest 1000 Billion! Tencent Actively Helps “Common Prosperity”,
Ma Huateng Takes the Lead Again. August 19, 2021.
Snape, Holly. University of Glasgow. Interview November 2021.
US-China Economic and Security Review Commission (USCESCR (a)).
Economics and Trade Bulletin. July 13, 2021.
US-China Economic and Security Review Commission (USCESCR (b)).
Economics and Trade Bulletin. September 14, 2021.
US-China Economic and Security Review Commission (USCESCR (c)).
Economics and Trade Bulletin. December 16, 2021.
Wang, Maya. Tightening Up. October 21, 2021. Chinafile. https://www.chinaf
ile.com/conversation/china-regulatory-crackdown.
White et al. Jack Ma and the Chinese Tech Titans’ Mission to Give Away Billions.
August 29, 2021. Financial Times.
Whyte, Martin. China’s Hukou System: How an Engine of Development Has
Become a Major Obstacle. April 24, 2019. China-U.S. Focus.
Whyte, Martin. Xi Jinping Confronts Inequality: Bold Leadership or Modest
Steps? In Ashley Esarey and Rongbin Han, eds., The Xi Jinping Era: Assessing
Political Leadership in Contemporary China, Seattle: University of Washington
Press, forthcoming, 2022.
Wong, Christine. Plus ça Change: Three Decades of Fiscal Policy and Central–
Local Relations in China. November 2021. CIJ Volume 19 Number 4.
Xi (a), Jinping. Understanding the New Development Stage, Applying the New
Development Philosophy, and Creating a New Development Dynamic. July
8, 2021. English edition of Qiushi.
Xi (b), Jinping. Solidly Promote Common Prosperity. Qiushi. September 2021.
Xinhua News. Xi Jinping Presided Over the Tenth Meeting of the Central
Finance and Economics Committee, August 17, 2021.
Yang, Anne-Stevenson. “Common Prosperity”: The Graft That Is Actually
Powering China’s Politics. November 11, 2021. Forbes.
Zhang, Weiying. Market Economy and Common Prosperity. 2021. Blog-
post. Accessed at https://freewechat.com/a/MjM5Nzg5OTcxMg==/265
0733149/1?raw.
CHAPTER 3
The Bureaucracy Strikes Back
Abstract The speech by Jack Ma instigated a new era of regulation

through a number of bureaucracies in Beijing. This began a period of
increased regulation over data, financial risk, antitrust, and other areas.
The most significant risk was the entry of Ant Financial into banking by
arranging loans for smaller banks. The risks are analyzed in detail to show
how they were exaggerated and how there was a loss to efficiency of finan-
cial intermediation. However, conflict between bureaucracies slowed the
enactment of new laws and resulted in a confused regulatory environment
for technology companies competing both within China and internation-
ally. In addition, the style of governance, and many of the rules, suggested
that the changes were as much about rectifying a perceived power imbal-
ance between the government and the private sector as it was improving
the business environment. The combination of aggressive intervention
and an uneven regulatory environment is likely to persist for a period
of time.
Keywords CBIRC · Zhou Xiaochuan · Ant financial · Financial risk ·

Shadow banking · Digital currency · PBOC · SAMR · MIIT · SAIC ·
Antitrust · NDRC

https://doi.org/10.1007/978-981-19-3042-3_3
28 A. COLLIER
After the fateful speech by Jack Ma, a wave of regulations swept over
the country’s technology sector. Many of these had been long in the
making as the regulators had watched with suspicion as the technology
companies had become financially powerful with millions of customers
supporting them. Agencies that had watched the growth of companies
like Alibaba and Tencent from startups to global giants had done little to
interfere. Now was their chance to impose regulations that would reduce
the companies’ market power—and also make them more beholden to
Beijing. This was what has become known as “regulatory catch-up”—
imposing rules in a regime that had been relatively relaxed. Regulators
were also taking advantage of the political environment to increase their
market share against each other, which we can think of as “bureaucratic
opportunism.” Since it was clear that the technology companies were fair
game for a revised legal framework the many regulatory bodies respon-
sible were now moving with alacrity to define the new regime. There was
another key factor that was crucial to the response, particularly by the
financial regulators, including the PBOC and the CBIRC. This was finan-
cial risk. The financial regulators had legitimate worries about the impact
of the explosive growth of online financial firms. Of particular concern
was Ant Financial, which had entered into the politically sensitive area of
bank loans. Thus, there were a mix of motives behind this mission creep
by the regulators in Beijing.
Regulators across the world are struggling to devise rules to control the
rising power of the internet industry. Anti-monopoly provisions regarding
companies like Amazon and Google are frequently debated in the U.S. It
is no surprise that China also struggles with these issues. In China, the
political directives from the State Council and the Politburo hold much
sway over ministries, and the agency ministers must spend much of their
time paying attention to the changing political winds, and ensuring they
have support from the Politburo. But the size of the Chinese ministries,
and the sudden increase in their status, lent this episode particular power.
Instead of a concerted effort by the central government to outline a clear
set of regulations governing the platform economy, the bureaucracies in
Beijing indulged in a free-for-all competition for market share. As legal
scholar Angela Zhang of the University of Hong Kong noted, “At the
central level, different ministries with overlapping functions and divergent
missions are relentlessly competing with each other for power, influence,
and prestige” (Zhang 2020).
3 THE BUREAUCRACY STRIKES BACK 29
This was a distinct change from recent history. The regulators in

Beijing traditionally had been quite weak. Much of this anti-regulatory
tone was a legacy of Deng Xiaoping’s encouragement of the private
sector. In many cases, they had avoided large-scale regulatory actions that
could result in failure and thus challenge their institutional power; they
were worried they would be outmaneuvered by more powerful ministries
or large firms with deep political connections. Instead, they tended to rely
on their local offices to tackle smaller, more manageable cases, and avoid
high-profile regulatory attacks that could flop (Zhang 2022).
When the bureaucracy did go after the larger firms, they had to
skillfully deploy scarce resources and power to enforce actions against
powerful institutions with important government connections, or even
government-owned state firms. Short-staffed, and without much power
to shut down or curtail a company’s activity, the ministries frequently
resorted to “extra-legal” ways to enforce regulations. These included
leaks to the press and threats to expose business practices that would
damage the reputation of the targeted firms. These actions would force
the companies to the bargaining table, knowing that they could suffer
serious consequences from a public attack on their business practices that
could bring even greater scrutiny from the State Council or the Polit-
buro itself. Thus, agencies like the planning agency and the Ministry
of Commerce, instead of wasting weeks and months of employee time
on lengthy investigations, would instead rely on extra-legal methods to
guarantee an outcome they would be happy with.
For example, in 2014 the planning agency, the NDRC, began investi-
gating automakers’ policies toward controlling prices from their suppliers.
The NDRC was eager to force the foreign producers to put a price floor
on what they paid to the domestic, Chinese parts suppliers. There was no
legal requirement for this but the NDRC wished to support homegrown
companies. The foreign automakers including Audi, BMW, and Mercedes
Benz, eventually agreed to a price floor for spare parts. The NDRC could
easily mobilize the political system to undermine the foreign carmak-
ers’ business in China. It would be highly risky for a foreign company
to launch a legal dispute with a government agency in China because
the domestic political situation would probably lead to an unfavorable
outcome. “The NDRDC leveraged media to deter firms strategically
from disobeying its orders and strong-armed them into obeying specific
demands” (Zhang 2020, p. 72).
30 A. COLLIER
This use (or misuse) of extra-legal methods to enforce government

actions has traditionally been much easier to deploy against foreign firms.
Hostility toward foreign companies is part of a strategy within China to
promote nationalism and to allow domestic companies to seize the advan-
tage against foreign competitors. Historically, there are many examples
of this in post-Maoist China. This has often occurred sub rosa through
non-legal or extra-legal means that don’t become public. For example,
since China’s entry into the World Trade Organization in 2001, foreign
banks have sought to increase their market share in China. However, they
have largely been unsuccessful due to opposition from local governments,
competing domestic companies, or from political obstacles instituted by
the government or regulators in Beijing.
However, regulators that attacked domestic companies, particularly in
the successful technology industry, through wholesale revision of the
rules, was a whole new ballgame. Domestic companies that have proved
highly successful have generally been encouraged in China. This was a
legacy of the gradual loosening of restraints against the private sector
under former leader Deng Xiaoping and continued under Wen Jiabao and
Hu Jintao. The technology companies, with their unprecedented growth
and ability to create whole new markets, were favored children of China’s
economic reforms.
This began to change under Xi Jinping. The attitude of China’s
paramount leader and the Communist Party will be addressed later on.
But we can say that the sheer size of the platform economy—and their
private ownership—was perceived as a threat to the leadership. Where
in the past China’s large companies had been state owned, suddenly the
Chinese government now found itself on the other side of the fence from
large, privately owned companies. Not only private, but with capital raised
from foreign sources. This heightened concerns within the Politburo that
there was too much power accumulating outside of the control of the
Communist Party. In addition, China’s government had become larger
and more powerful than it had been in the past. This was due to the
growth of the economy and the centralizing efforts of the current leader,
Xi Jinping. Given these antecedents, it is fair to say that the crackdown
on the technology sector was an “accident waiting to happen” or, perhaps
more accurately, a “policy waiting to happen.” That’s not to argue that it
was inevitable, but that the seeds were there.
Since the later years of Xi Jinping’s leadership, the anti-monopoly laws
and enforcement had slowly been increasing. The anti-monopoly law
stated that a firm is dominant if it has more than 50% share, two firms
with 66%, and three firms with 75%, but this had been loosely enforced
(Zhang 2020). The antitrust authorities imposed 12 penalties relating to
market dominance in 2018, 16 in 2019, 25 in 2020, and imposed a fine of
18.2 billion yuan on Alibaba—three times the size of the largest previous
penalty on Qualcomm. Alibaba and Tencent accounted for 60% of the
fines imposed on the industry.
The most aggressive among the host of agencies responsible for the
renewed focus on regulating the platform economy was the State Admin-
istration for Market Regulation (SAMR). To solidify the state’s approach
to market competition, in 2018 SAMR was carved out of three other
agencies. The agencies previously responsible had been the General
Administration of Quality Supervision, Inspection and Quarantine; the
China Food and Drug Administration; and the State Administration
of Industry and Commerce (SAIC). But other bureaucracies had indi-
rectly participated in market regulation, including the powerful NDRC,
and the Ministry of Commerce (Mofcom). Mofcom was responsible
for overseeing mergers while the NDRC and the SAIC investigated
problems relating to state planning, corporate registration and other
matters. SAMR’s power was further enlarged in November 2021 when
the Chinese government established the State Anti-Monopoly Bureau
directly under the State Council in the same building as SAMR itself.
SAMR Deputy Director Gan Lin was promoted to chief, giving SAMR
a direct line to the State Council (USCESCR December 2021). The
creation of SAMR set the stage for stronger anti-monopoly regulation
in China.
In 2020, the 60-year-old Beijing native who was promoted to be
Governor of SAMR, Zhang Gong, had good political connections in a
time of regulatory strength. The agency’s power—as with many—was in
part a function of its relationship to the senior leadership rather than to
its bureaucratic structure and institutional function. Although Zhang’s
background was in electrical engineering, he had cultivated management
skills by earning a Master’s Degree in economics with a focus on enter-
prise management at the Capital University of Economics and Business in
Beijing. This is a solid career path for a technocrat trying to broaden his
reach into management. Later in his career, he served on the standing
committee of the Communist Party in Beijing, which meant that he
had spent time with leaders in Politburo just by virtue of geographic
proximity.
32 A. COLLIER
In September 2021, in an article published in the People’s Daily,

SAMR trumpeted its successful anti-monopoly sweep. The article referred
to ten decisions that “strengthens anti-monopoly and prevents the disor-
derly expansion of capital” (People’s Daily, September 2021). These ten
generally were local cases involving industries such as autos and cement,
but one of them halted an acquisition by one of Jack Ma’s companies,
Alibaba Investment Co. Such a public notice was a sign of the growing
power of a once quiet bureaucracy.
Even more telling was an op-ed in the People’s Daily in late 2020
promoting the importance of cutting Alibaba down to size. The article,
entitled “Strengthening anti-monopoly supervision is for better develop-
ment ,” argued that the rules of the road were crucial for the success of
the growth of the platform economy. “If you don’t follow the rules, you
can’t make a circle.” The op-ed compared China with other countries and
argued that China was simply following the lead of both the U.S. and the
European Union, which in recent years had strengthened their respective
anti-monopoly rules (Chao 2020).
In January 2021, SAMR issued draft regulations for “Antitrust Guide-
lines for the Platform Economy.” The document was aimed at the
platform companies because Beijing had no interest in reducing monop-
olies in other areas of the economy—including state firms. They were not
to be touched. As one analyst noted, “This document is tailored to specif-
ically target the behaviors of Chinese Internet companies, not a general
framework to cover the entire Chinese economy. That may be by design,
because many sectors are state-owned and thus definitionally monopo-
listic. It’s a real life outcome of the pros and cons mixed together. The
pros are the rules are very up-to-date with how the Internet economy
and tech platforms work. The cons are it conveniently leaves out other
monopolistic industries” (Xu 2021).
Several rules were designed to force companies to limit their opera-
tions to one operational platform. This would prevent using monopoly
power—or even just their large size—from becoming dominant in parallel
industries. This was a significant expansion of the power of the anti-
monopoly regulation in Beijing and marked a contrast from the previous
ways they handled market regulation, which tended to be quite specific
in scope.
Moreover, the fact that the 2020 Central Economic Work Conference
listed antitrust and preventing disorderly capital expansion as one of the
eight economic key tasks in 2021 shows that the Central Committee
of the Communist Party was attaching great importance to antitrust,

although there is some question about the effectiveness of their efforts
(Yang 2021).
Apart from rule making, though, the government continued to use
non-legal methods to whip the industry into line. This was very much
on display during several important meetings. In November 2020, the
CAC and the Tax Administration held what they called an “administra-
tive guidance meeting” with the top 27 online firms including JD.com,
Meituan, Baidu, Alibaba, and others. The regulators ordered the firms
to stop abusing their market position. But the two ministries also threw
in a grab bag of other orders concerning counterfeit goods, food safety,
advertising standards, personal data protection, and fraud. None of these
fell directly under the purview of either the CAC or the Tax Adminis-
tration. Instead, it was a government using the media megaphone to tell
the online firms to improve their governance. These were not rules estab-
lished by an institutional process but were akin to a parent admonishing a
child to improve her behavior. No one could rightly protest against what
were legitimate grievances but such signaling is a far different, and less
institutionalized, process than rule-making (SAMR 2020).
Furthermore, in September 2021, in a public dressing down, the regu-
lators called a meeting in Beijing with the top companies. The companies,
which included Alibaba, Tencent, ride-hailing company Didi Chuxing,
and the food delivery firm Meituan, were called in to discuss their support
for workers under the fledgling “gig” economy. They were ordered to
follow guidelines issued by the lead agency, the SAMR, for worker protec-
tion. But in the new governing style under Xi Jinping, the companies also
were expected to join forces with the government to support a new policy
shift in favor of workers. The ten internet companies were directed to
“play a leading role” in caring for these workers and shouldering the social
responsibilities for employing them. This strayed from a purely technical
discussion of regulations. To show that the full might of the govern-
ment was behind them, the statement about the meeting was issued by
the Ministry of Human Resources and Social Security, which ordered
the obedient firms to draw up a road map to comply with the guide-
lines, including signing up gig workers to full contracts (Shen, Xinmei
September 2021).
The other ministries did not want to be left out of the growing
tide against the technology sector. Despite the united front, the Beijing
meeting led to the revival of inter-bureaucratic competition. Two tech
34 A. COLLIER
companies, Tencent and Alibaba, were summoned to Beijing for a sepa-

rate meeting with the Ministry of Industry and Information Technologies
(MIIT), after which the MIIT said it would increase competition by
allowing rival companies into their internet “walled gardens” to offer
services. This meeting increased the pressure on SAMR to act more force-
fully because the MIIT technically did not have the authority to enforce
anti-monopoly provisions—but SAMR did (Riordan 2021).
There is no doubt there was public support for many of the new regu-
lations. Didi’s drivers were widely considered to be underpaid and had
few benefits, and the gig economy was short-changing the livelihood of
many workers. The question was whether the scattershot approach was
well organized and whether there were significant political considerations
behind many of the new regulations. As will be discussed in another
chapter, the Party did view these well-capitalized technology firms as a
threat to their monopoly of power, and the expansion of regulations
would inevitably reduce that threat.
One of the most important aspects of the technology crackdown was
the restrictions placed on Ant Financial. This has significant implications
for the future of financial intermediation in China. From the point of
view of the regulators, Ant had gotten too big, and online finance itself
posed a problem. The main issue was that the size of the industry, and
lack of controls, began to pose a risk to the financial system. However,
in an example of overly fast regulatory “catchup,” the industry moved
so quickly that the regulators—mainly the CBIRC and the PBOC—were
racing to figure out exactly what these online financial firms were doing
and what their potential impact was on the financial system.
To be fair, the stability of the financial system had tilted the balance
toward more regulation even before the Ant IPO was canceled. Beijing
had created the Financial Stability and Development Commission in 2017
and the following year merged the banking and insurance regulators to
form the CBIRC (Zhang 2022). The CBIRC, along with the PBOC,
had a mandate to prevent risk to the financial system. The 2015 stock
market crash, which the regulators desperately tried to remedy through
state buying, in the minds of the leadership was a disaster due to the
complete loss of control. They did not want that to happen again. Ant’s
numerous businesses in online lending, investment management, and
digital payments, made it the largest online company in financial services.
It managed money and arranged loans. It also held a treasure trove of data
that was proprietary to its own computer servers. All of these functions
touched a number of hot buttons in Beijing.
So, the regulators become more aggressive. In September 2021, Ant
agreed to share credit data from its Huabei consumer lending business
with the PBOC. This included everything from when the account was
established, how big the credit line was, and the status of repayment of
the loans. There were certainly risks to the Chinese economy from the
Ant business model, but these and related regulations were quite a signifi-
cant retrenchment of Ant’s operations. It was not clear that the credit data
really was necessary from a regulatory standpoint. The PBOC could easily
require an overall snapshot of Ant’s business model, and make regulatory
changes regarding its lending practices, without demanding wholesale
transfer of customer specific data. This spelled more of a power grab than
a regulatory discussion of risk parameters. It could be that the two finan-
cial bodies were sending signals to the rest of the online industry that
data would no longer be proprietary to private firms but would have to
be handed over en masse to the government. Whether it was bureaucratic
“mission creep” or a slap in the face of private financial intermediation, it
has slowed the growth of one of China’s most dynamic industries.
Online finance, particularly in bank lending, is one area where Beijing
may have had legitimate concerns about the rapid growth of financial
technology. Ant Financial more or less invented the industry of online
financial intermediation. Where the banks failed to innovate, Ant quickly
stepped in and became a major force, arranging billions of yuans in loans
to companies across China. In addition, Ant’s parent, Alibaba, along with
competitor Tencent, had dominant market shares of the online payments
industry, which they had created.
The stability of the financial system is a central part of China’s growth
and there were growing concerns about Ant’s lending methods. But the
measures taken—essentially banning Ant from the banking industry—
were extreme as online finance offers substantial advantages over bricks-
and-mortar banking. It is worth examining the risks of Ant’s business
model in detail to judge whether the crackdown on the company was
regulatory oversight or regulatory overkill.
One of the most important ministries in Beijing is the central bank—
the PBOC. It is the beating heart of the financial system. Not only is it
in charge of the country’s money supply, but it is the paramount finan-
cial regulator (Until 2003, it was the only regulator, and after then has
36 A. COLLIER
shared many duties with the China Banking and Insurance Regulatory
Commission).
For much of 2010s, the PBOC had been struggling to control the
giant pool of capital that flowed into the financial system as the result of
the 2009 financial stimulus. That capital had created a host of shadow
banks and shadow banking products that had been lending money
without much oversight. Although this capital was crucial in helping
China avoid a financial meltdown similar to the U.S. financial crisis, it
also left the country with a significant debt burden and an unregulated
shadow banking system. Thus, for much of the latter part of the decade,
the PBOC struggled to convince the leadership to cut back on lending,
both from the banks and the shadow banks. These policies were known
within China as “deleveraging” the financial system. The lower debt load
would have the added advantage of “de-risking” the banks. When Xi
Jinping launched the technology crackdown, the PBOC already had a
lot on its plate.
The sudden rise to importance of the technology companies added a
new responsibility to the PBOC’s job description. These service compa-
nies were responsible for billions in payments and loans to private
customers and small businesses. The online world had become an impor-
tant part of China’s financial system. In 2021, mobile transactions
accounted for 66% of all monetary transactions in China, with 23% in
cash and 7% for the credit card business. By 2020, Alipay and WeChat
Pay performed 94% of mobile transactions. In e-commerce, Alibaba and
JD.com together handled three-quarters of all online market distribution
(Godemont July 2021). The PBOC had to devise regulations on Ant
Financial’s loans to the regional banks, payment systems from Alipay and
WeChat Pay, and proposals for digital currencies.
There were concerns about unconstrained money flows in the era
of big tech—whether through payments, loans or digital currencies.
For example, even before Jack Ma’s speech, there had growing oppo-
sition to Ant’s influence in the economy, and proposals for new ways to
control capital flows. At one conference just a day after Jack’s speech,
Huang Qifan, Chongqing Mayor and Vice-chair of the National People’s
Congress Financial and Economic Affairs Committee, accused Ant of
promoting the company at the expense of the country’s financial stability,
and added that Ant had encouraged investors to take on too much debt.
On top of the lack of regulatory controls, the growth of the private
sector’s payments and lending through Ant, Wechat Pay, and Alipay,
posed a threat to the central government’s plans for a digital currency.

The digital currency would allow the central bank to have tighter control
over the money supply, and also to have access to detailed knowledge
about where payments were made and to whom. This centralized database
would grant the central government a window into the financial hold-
ings of every citizen in the country, along with senior Party officials
that may have been involved in corruption. Beijing would prefer that
this information remain safely in government hands. As one Australian
expert noted, “A key motivator in the Chinese government’s push for
DCEP (Digital Currency Electronic Payment) and its digital currency is
that in the country’s leap into the digital economy, tech companies such
as Tencent and Ant Group have gained greater financial power. As the
government continues to clamp down on tech firms, implementing new
laws designed to curtail private companies’ control of cash flow and the
collection of personal data, future development of Alipay and WeChat Pay
is likely to become forestalled” (Freudian 2021).
When it came to online payments, the central bank did not have the
resources to adequately understand the rapidly changing industry. Nor
did the major state owned banks have a strong grasp of digital currencies
or payments. As state owned institutions, they were slow to act, particu-
larly in introducing new digital services—which left a gaping hole for the
technology firms to jump through. There had been half-hearted attempts
by the state banks to provide digital payments to compete with Alibaba
and Tencent but most had made little progress. They already had an
established business making loans to state firms, and had a more or less
automatic lock hold over savings deposits across China. The banks had
such a cozy business, why shake it up with complicated new technology?
The PBOC was not happy with the private sector dominating digital
finance. A major concern was payments data, which was increasingly in the
hands of the private operators. This was a decided business advantage for
private firms. They could use this data to sell other products. According to
one analyst, “Importantly, in the Chinese context, the payment provider
has access to a broader set of information regarding customers’ financial
life. For example, a regular bank probably does not know the exact rela-
tionship of everyone who sends you a birthday gift but does know the
amount and name of the sender if sent by a check. But by merging the
social media network of WeChat with the Red Envelope fund transfers,
WeChat Pay does. For example, if you are a younger adult who is lucky
enough to receive regular or even sporadic support from your parents,
38 A. COLLIER
grandparents, or other extended family, WeChat Pay is able to see into

your network both socially and financially” (Klein 2020).
Initially there was hesitancy at the PBOC to decide who would
control the digital currency. In early 2021 former PBOC governor Zhou
Xiaochuan described a system where the central bank would build the
infrastructure and a “second tier” of banks, telecom operators, and third-
party payment platforms would be the retail operators (Zhou 2021).
But that’s not how it would be. With the shifting winds in Beijing, the
PBOC realized it should have greater control over distribution of the
currency and especially the transactions data. The central bank approved
a number of commercial banks for early trials but excluded the two
largest payment transaction firms, Ant and Tencent, from those tests of
the currency. The supremacy of the central bank’s digital yuan was a
proof that payment systems are a zero-sum game—market share gains for
one institution spells trouble for any competitors. And Ant and Tencent
were now competitors to the PBOC. Clearly, the PBOC had moved into
new, more aggressive territory against the private sector as a result of the
atmosphere following Jack Ma’s speech (Yang 2021).
But the payments business was a minor skirmish compared with the
real war between Ant and the PBOC. That war was over the future of
Ant’s participation in the money lending business. The biggest part of
China’s financial systems are bank loans. Ant’s entry into this business
could pose a threat to the control of capital by the state. Thus, Ant is a
good case study of the pros and cons of financial regulation.
In 2012, I visited Hangzhou to interview a senior executive of Alibaba.
The meeting had been arranged by a colleague at the Chinese security
firm in Hong Kong where I worked. I asked the man for his title, and he
said he was director of the credit and Finance Group. I didn’t know that
Alibaba had formed a division outside of the core business selling goods
online, much like eBay. It turns out the executive was in charge of more
than 2 billion yuan in capital that it was lending to its customers to assist
their growing transaction businesses. He made the case that Alibaba’s
customer transactions data was a treasure trove of data that gave credit
group a clear picture of credit risk. This small cog rose to become a
well-oiled machine in Alibaba’s empire—Ant Financial.
Ant Financial was officially found in October 2014, spun out of Alipay,
Alibaba’s mobile payments company. Ant expanded beyond payment
services to engage in wealth management, financing, insurance, and a
credit score business. Alipay itself was launched in 2010 when the central
bank granted 27 online payment companies licenses to operate online

payment businesses. In 2012, before Ant was formed, Alipay was granted
a special license to offer customers investment products. It was the “mid-
dleman” between the customer and the fund manager. In June 2013,
Alipay offered a new investment product called “Left Over Treasure” and
within six months it had more than 30 million customers (Zhang 2018).
Ant Financial’s rise was so rapid that it quickly became a dominant
player in China’s banking industry. However, even in its early days during
my visit in 2012, the company’s ambitions were amply evident. The
executive I interviewed said Alibaba intended to grow its micro loan busi-
ness by more than ten times to 25 billion by 2014. According to my
notes from the meeting, Alibaba believed that its key customers in C2C
and B2B were immune from macroeconomic slowdowns. Alibaba also
believed that its ability to manage risk due to its transactions data was
unmatched by any bank.
How could it do this? After all, China’s brick-and-mortar banks had
more than 200,000 branches scattered across the country, with deep
connections to their customers. Ant was a fledgling firm with nothing
more than a handful of employees and a parent company with a trans-
actions business that arranged the sale of shoes, shirts, and other goods.
To make its loans, Ant relied on a combination of customer transaction
data, customer reviews, and other online information as a substitute for
the collateral that a bank generally requires. No wonder why the PBOC
was nervous. This system bypassed the usual bank channels. This could
lead to an erosion of the valuable savings deposits that are the heart of
China’s subsidized capital for the state corporations. The banks generally
paid relatively low-interest rates for deposits but they were convenient and
considered safe in a country where financial transactions were often risky.
Without this deposit base, the state system would collapse.
The irony is that Ant had extended an invitation to the bricks-and-
mortar banks to join their new business. But the banks had been too
scared of venturing into new territory. According to one Alibaba official,
“We have offered our customer list to banks and they don’t want our
customers because there is no way for them to monitor the customers”
(Collier 2012). Instead, Alibaba was seeking to find new capital to expand
the business on their own.
Ant’s lending became a huge bone of contention between Ant and the
PBOC. China’s banking system for decades was dominated by the Big
Four state-owned banks. They had been carved out of ministries handling
Another random document with
no related content on Scribd:
“Done!” cried Hobart Eddy, rapping on the table, “and what am I bid
for this first appetizing and innocent confection, this tart, all compact
of cream and spices—” So he went on, and I clung to my chair and
expected the whole place to crumble away and Nichola to call me to
breakfast in New York. It was too wonderful.
But it was all true. They were caught in the spirit of the happy hour
as if this had been some new game contrived to tempt their flagging
interests. They gathered about the table, they bid one another down,
they prompted the auctioneer, they escaped to corners with cream
tarts—my cream tarts!—for which they had paid a price that made
me tremble. And as for our original guests, they were lined up at a
respectful distance, but quite frantic with the excitement, for they
were all devoted—as who would not have been?—to the two to
whom this would mean all happiness. And as for Bonnie and Karl,
scarce able to breathe they sat on the stone bench from Thebes and
clung to each other’s hands. Ah, there never was such an hour. It
makes me young to think of it.
So it went on until the last tart of the portion which he had reserved
was auctioned to the highest bidder. And hardly had Hobart Eddy
invited the others to the table and paused for breath when the
question that had been forced from my mind by the unexpected
arrivals was answered: Nichola appeared in the dining-room door.
She had made herself splendid in her best frock, a flaming scarlet
merino; for Nichola has never lost her Italian love of colour. On her
head she had a marvelous cap of the kind that she can fashion at a
moment’s notice from a linen pillow case and a bit of string. And she
too bore a tray, a tray of that which had detained her below stairs
fashioning it for a surprise, a tray, in short, heaped with tiers and tiers
of pie-crust Guinea goats.
On these Hobart Eddy seized with an ardour that was beautiful to
see. Nichola, frowning terribly, stood back half minded to break into
shrill upbraidings. And while I was trying between my tears and
smiles to make her know what it was all about, her whole herd of
goats was sold off at a price which she afterward told me, privately,
was as high as the Pope in the Vatican could expect for his pie
crusts.
They swept the pile of crisp notes and shining coin into a hat and
thrust it in the hands of Nichola, who stood nearest; and that old
woman at their bidding crossed the slippery oaken floor and poured
the treasure in the lap of little Bonnie, while the daughter of the
Hittites sobbed on the first shoulder, which chanced to be that of her
ancient enemy, the housekeeper.
Nichola’s presentation speech was brief and to the point.
“Here,” she said, “get marrit.”
Bonnie, dear little maid in muslin and rosebuds, stood up with Karl,
both pink and white to see; and they bowed, and laughed through
their tears. Ah, there were tears in the eyes of others of us too as we
looked; and Madame Sally Chartres and a very gay and magnificent
Mrs. Dane-Orvil and the cook formed one group and impartially
smiled at one another. Some way, a mask had fallen.
With Nichola’s words still in our ears the clock chimed quarter after
ten, and in the moonlight of the open door appeared on a sudden the
eager, concerned face of the Reverend Arthur Didbin, come to keep
his appointment with Pelleas and me.
At sight of him Pelleas fairly beamed.
“Why not?” he cried out; “what do these two young people say? Why
shall they not be married now?”
Why not, indeed? The proposition was met with acclamation. They
hardly waited for the frightened, ecstatic nod of star-eyed little
Bonnie before they had the supper table pushed aside—indeed, I do
not remember now whether it was the railway president and Mr.
Dudley Manners who did most of the work or the Scotch butler and
the footmen, for they all helped together. And Bonnie and Karl stood
up in the door of the salon, and so did the daughter of the Hittites,
and Hobart Eddy insisted on being joint best man with the Scotch
butler, and the Reverend Arthur Didbin married the two young lovers
then and there. I have always held that the license demanded in
some parts is unromantic nonsense.
After that there was a blur of adieux, and Hobart Eddy kissed my
hand and even when his machine had been started came running
back in the moonlight to get from Karl the address of his mother “in
the old country” so that he might cable to her and have her rejoicing
by next morning. No, never tell me that any man is mere idler and
dilettante, for I have seen the heart of one such and hereafter I dare
not disbelieve in any one.
They all swept down the moonlit drive, hands waving, motor horns
sounding; and the haughty Scotch butler in full Highland costume
stood between two pillars and played his bagpipe to speed them on
their way. The door of the tonneau of the last motor had just been
hospitably opened with the offer to set down the Reverend Arthur
Didbin in the village when that gentleman, his gray hair blowing,
hurried to where Pelleas and I were standing.
“But,” he said anxiously, “did you not wish me for something? Did
you not wish—”
At that Pelleas and I looked away from each other in sudden
consternation and then with one accord smiled and shook our heads.
With our assurance he turned away and in silence we watched him
down the drive. And after the last motor had disappeared behind the
shrubbery Pelleas and I lingered alone in the moonlit portal breathing
in the roses, and still we did not meet each other’s eyes. But when
there was at last no excuse for our waiting there longer I looked up
at him shamefacedly enough.
“Pelleas,” I faced the truth, but solemnly lest he should imagine that I
was not filled with regret at our neglect, “Pelleas, we forgot our
golden wedding.”
“But there has been a golden wedding all the same,” said Pelleas.
However, in fear of what the balcony of roses would think of our

defection, we stepped out there for a moment on our way upstairs.
And there Pelleas said over something that is a kind of bridal song
for a Golden Wedding:—
“My own, confirm me! If I tread

This path back, is it not in pride
To think how little I dreamed it led
To an age so blessed that by its side
Youth seems the waste instead!”
We do not think that the balcony itself can have agreed with this,
because it was a moon balcony, made for youthful lovers. But roses
are like a chorus, explaining what is; and no one can persuade us
that these failed to understand.
XV
THE WEDDING
Toward the end of July we found that the lodge at Little Rosemont
was to be vacant for a month or two and Pelleas rented it, furnished,
from the agent; and we took Nichola and moved down the length of
the gravel to the littlest house in the world, set in the littlest garden.
There we were established three days and more before Avis and
Lawrence were expected home.
We had merely crossed the garden from the great house, and yet life
in the little house seemed another matter, as if a harp were heard in
a room instead of in an open field. We felt less professionally alive
and more free to live. It was as if, Pelleas said, we were reading a
poem rather for the exquisite meaning than for the exquisite rhythm.
There was another reason why the lodge invited us. Though it was
nearly August, its tiny garden, walled round with a half-moon of
hedge, was rich with roses as if, Pelleas said, for an after-meeting of
certain Junes. For the lodge garden had been set with monthly
roses, those prodigals of giving, and there Chinese roses, Bengal
roses, Giant of Battles and Cloth of Gold rioted about a Hundred-
leaved rose from the Caucasus and that week they were all ripe with
bloom.
That first morning as we stepped on the porch was a kind of
greeting, as intimate and personal as a nod. Pelleas and I stood in
the garden with the sun, as I believe, slanting madly in every
direction and butterflies vanishing against the blue. At all events, that
is as I soberly recall the day; and yet it is the day which we
remember as our one offence against love. It was the one time in our
life that we said of two lovers in whom we believed: “Are we sure that
they are right?” instead of our usual: “Let them be married to-day!” I
can hardly credit my own feint at heartlessness.
We went across the strip of terrace with a pleasure that was like the
pleasure of beginnings. In the center of the garden was a little pool
for water flowers and there we set the fountain free in the sheer
delight of bringing about all the liberty possible; and we watched the
scarlet tanagers bathing in the trickling outlet beside the Hundred-
leaved rose. And so we came at last to the arbour in a green corner
of the wall, and in its doorway we stood still with the reasonable
impression that we were thinking what we seemed to see.
On a bench beneath a window where the roses made an oval open
to the garden sat a girl. At first, save the shining of her hair, I saw
only that she had beside her a little traveling bag and, also beside
her, a fine, manly boy of not a day more than twenty-two. She was
crying a little and he was attempting with adorable awkwardness to
comfort her. At first glance the most rational explanation was that
they were run-away sprites from some neighbouring goblin
settlement, and Pelleas and I were making a sympathetic effort to
withdraw when they looked up and saw us.
Lo, with a little traveling bag between them, there were Lisa and Eric.
Almost before I grasped the import of this I hurried forward and took
Lisa in my arms. In all possible affairs I firmly believe that the kiss
should come first and the explanation afterward.
“But it is Lisa!” I cried. “Pelleas, it is Lisa and Eric. Wherever have
you come from, dear heart?”
The story was out in one burst of courage with the tears so near, so
near.
“I came from Chynmere,” she said; “Uncle Dudley and I are still at
the Wortleys’, you know—that is, Uncle Dudley is there. I—I ran
away from the Hall this m-morning. I—I eloped. I—Eric—we are
going to be—”
Of course the rest was luminously clear.
“Dear heart,” I cried, “then what in this world are you crying for?”
Crying. In the midst of one’s elopement on a glad morning with the
sun slanting in every direction and butterflies vanishing against the
blue.
“At all events,” said young Eric Chartres, with the most charmingly
abashed smile, “I’m not crying.”
Bit by bit this logical climax of the Summer’s situation was imparted
to us—indeed, Pelleas and I had already secretly prophesied it. For
Dudley Manners to have charge of little Lisa at all was sufficiently
absurd; but for him with his middle-aged worldliness to have in
keeping her love story was not to be borne. Lisa and Eric had been
betrothed since Spring and in those two months Dudley Manners’
objection on the score of their youth had not been to any extent
outgrown. Moreover, Lisa explained tremulously, Uncle Dudley had
lately given out that she had not yet “seen the world.” Therefore he
had taken passage for her and a Miss Constance Wortley, a
governess cousin at Chynmere Hall—elderly and an authority on
plant life in Alaska—and they were to go abroad to see the world for
two years; and Eric was of course to be left behind.
“Two years,” Lisa said impressively, with the usual accent of two
eternities; “we were to go to the north of Africa to watch the musk
roses bloom and to the Mediterranean to look for rosemary. Uncle
Dudley thinks that would be seeing the world. So Eric came this
morning early and I slipped down and met him before any one was
up. And we came here. I told Eric,” Lisa confessed, “what you told
me about Cornelia Emmeline Ayres’ elopement. And we knew you
would both understand.”
Pelleas and I looked at each other swiftly. Nature is very just.
“But what are you crying for, dear?” I puzzled then; “you are never
sorry you came?”
“Ah, but,” said Lisa sadly, “I think that Miss Wortley really wants to go
to Europe and wait about for things to bloom. And now of course she
can’t. And then they say—Uncle Dudley says—that I can’t make Eric
happy until I know something of life.”
“My dear,” said I from the superiority of my seventy years, “I don’t
know about the rest. But that much I am positive is nonsense.”
“Isn’t loving somebody knowing all about life?” Lisa asked simply.
“It is,” Pelleas and I answered together.
“Ah,” Lisa cried, brightening, “I said you would understand. Didn’t I,
Eric?”
Eric raptly assented. I had always liked the boy. His whole mind was
on Lisa and yet, though from the edges of his consciousness, he had
an exquisite manner.
“At all events,” said I when presently I left Lisa in the flowered chintz
guest room, “let us lunch first and be married afterward. Whatever
happens you must have one of Nichola’s salads.”
I hurried downstairs longing to find Pelleas and to plan with him how
we were to bring it all about; but Pelleas was still in conference with
that young lover and they were walking up and down the path, heads
bent, brows grave, as if the matter were actually one requiring the
weightiest consideration. I stood for a moment at the hall window to
watch them, with all my heart longing to cry out: Never mind the
reasons. Look at the roses. It is perfectly easy to see what they
think.
Instead I went to the kitchen to say a word about luncheon. And the
day was so sunny and the guests at luncheon were so to my liking
and my heart was so full of their story that, as well as for a more
practical reason, I was obliged to tell something of it to Nichola.
Nichola was washing green leaves, and these, tender and curled in
her withered hands, were as incongruous as a flush I had once
detected on her withered cheek. In her starched print gown Nichola
looked that morning like some one cut from stiff paper.
“Nichola,” said I, “I think we may have a wedding here this
afternoon.”
Instantly her little deep-set eyes became quick-lidded with
disapproval.
“It is by no means certain,” I pursued, “but we hope to have it here.
And,” I advanced delicately, “could you possibly have ready for us
something frozen and delicious, Nichola? With little cakes? Then you
need make no dessert at all for dinner.”
Nichola looked at me doubtfully, pulling down her brown print
sleeves over her brown wrists.
“Che!” said she, “if it is a runaway match I cannot do this.”
I looked at Nichola in amazement. I was used to her denials; these
were merely the form that her emotion took. I was used to her
prejudices; these were her only pastime. But I had never before
heard her offer an objection which seemed to have a reason.
“Why not—but why not, Nichola?” I cried.
“I had a sister,” Nichola explained unexpectedly; and in all these forty
years and more I had never before heard her sister’s name upon her
lips. “She went quietly, quietly to San Rafael an’ a priest married her
to Beppo an’ they came home for supper. But no good came. Beppo
was drown’ from his boat within the year an’ with him a net full of fine
fish. If it is a runaway match I cannot do this. No good will come.”
“But, Nichola,” I urged reasonably, “you would not be blamed.
Though to be sure I may ask you to telephone to Mr. Didbin, that
young rector at Inglese. But you would not be blamed. And to make
cream sherbet, that would be no part of the ceremony. And little
cakes—”
“No good will come!” cried Nichola shrilly; “for the love of heaven,
have I not said how Beppo was drown’ with all his fish? It is not holy.”
“Nichola,” I asked with dignity, “will you be sure to have a particularly
delicious luncheon to-day? And will you make for dessert to-night a
sherbet, with little cakes, and have it ready in the afternoon?”
I went away with a false majesty covering my certainty that Nichola
would pay not the slightest heed to my injunction. Nichola is in
everything a frightful nonconformist, from habit; if to this were really
superadded a reason I could not tell what might happen, but I felt
sadly sure that Lisa and Eric would have for their wedding feast
afternoon tea and nothing more.
“Nichola!” said I from the doorway, “what made you think that they
had run away?”
“Che!” said Nichola grimly, “I saw them come in the gate. Have I
lived these seventy years always, always with my two eyes shut?”
As I hurried away I marveled at that. Once Nichola had unexpectedly
proved to me that she has wishes and even dreams. Was it possible
that she knew a lover when she saw one? After all, that is a rare gift.
At the foot of the stairs Pelleas met me with a manner of nothing but
gravity.
“Pelleas!” I cried, “isn’t it delightful? Wasn’t it providential that they
came to us?”
“Etarre,” said Pelleas solemnly, “I’m not at all sure that we oughtn’t to
send them straight back to Chynmere Hall.”
If Pelleas had proposed persuading Lisa and Eric to forget each
other I could have been no more amazed. Pelleas, who always
pretends enormous unconcern in all romance and secretly works
with all his might on the side of the adventure, Pelleas, to speak in
austere fashion of sending two lovers home. What did he mean?
And did he think that a course in the flora of Europe would make
anybody any happier whatever?
“Pelleas,” I cried, “how can you? When we are so happy?”
“But you know we didn’t elope,” Pelleas argued.
“Wouldn’t you have loved me if we had?” I inquired reasonably.
“Of course I would,” cried Pelleas, “but—”
“Ah, well, then,” I finished triumphantly, “it’s the same way with
them.”
I recall a distinct impression that I had the better of the argument.
“But you see,” Pelleas persisted gently, “after all they are so
appallingly young, Etarre. And if Dudley Manners were to be angry
and if he were to disinherit Lisa, and so on—”
“As for things going wrong,” said I, “can anything be so wrong as for
two who love each other to be separated?”
“No,” Pelleas admitted justly, “nothing can be. All the same—”
“Pelleas!” I cried in despair, “we could have that young rector over
here, and they could be married in the little round drawing-room—or
in the rose arbour—or in the garden at large. Think of it—cream
sherbet and little cakes afterward and us for parents and wedding
party and all. Then you and I could go straight to Dudley Manners at
Chynmere and tell him how it was, and I know he would forgive
them. Pelleas! Can you really think of that dear child spending two
years with an authority on plant life in Alaska?”
“Instead of going to him afterward,” said Pelleas boldly then,
“suppose you and I leave here after luncheon and drive to Chynmere
and make Dudley Manners consent? And bring him and Miss
Constance Wortley back to the wedding!” he finished with triumphant
daring.
“And not be married secretly?” I said lingeringly, as if the secret
wedding were our own.
“Ah, well,” said Pelleas, “at all events we won’t tell him on any
account where they are.”
So it was settled, and when presently we four went out to our tiny
dining-room courage and gayety were in the air. Our dining-room
was white and dull blue with a wreath of roses outside every window
and a bowl of roses on the table. And if Nichola considered it
reprehensible to assist at a “runaway match” she manifestly had no
such scruple about the luncheon to precede it for she set before us
the daintiest dishes. I could see the while how her little, quick-lidded
eyes were fixed disapprovingly on the young lovers; but then
Nichola’s eyes disapprove of the very moon in the sky. I wondered,
as I looked at Lisa in the noon of her fresh young beauty, and at Eric,
so adoringly in love, how Nichola could even pretend to disapproval
at sight of them; and if she had been any one but Nichola I would
have suspected her conversion, for of her own will she served our
coffee in the rose arbour. Whereupon Pelleas and I became
absorbingly interested in the progress of some slips which had been
in the ground about six hours and we wandered away to look at
them, cups in hand, and left those two to take their coffee in the
arbour—in memory of a certain day when we had been left to drink
our coffee alone. And when we came back we scrupulously refrained
from looking whether they had so much as sipped a thimbleful.
Then, feeling deliciously guilty, we announced to our guests that we
had an errand which would keep us away for an hour. And that if it
should seem best there would be ample time for the wedding on our
return. And that at all events they must decide whether they would
be married in the round drawing-room, or in the rose arbour, or in the
garden at large. Also, not knowing what warning or summons we
might wish hurriedly to send, I added to Lisa:—
“And if the telephone rings, dear, you would better answer it yourself.
For it may be Cupid and ministers of grace. No one can tell.”
“O, Aunt Etarre,” said Lisa prettily, “this is perfect of you. Isn’t it,
Eric?”
The way that Eric shook the hand of Pelleas three times on the way
to the gate might have indicated to some that he thought it was.
Yet there we were, hastening out in the world to find a possible
obstacle to all that innocent joy. Never before had we been guilty of
such disaffection or even of prudence in such a cause.
“Pelleas, O Pelleas,” I said as we hurried down the lane for a
carriage, “but suppose it doesn’t turn out as we think? Suppose
Dudley Manners is furious, suppose he guesses where they are and
suppose—?”
“Pooh,” said Pelleas in splendid disdain. “Dudley Manners. Thirty
years ago I took a polo championship away from him when he was
looking directly at me.”
And it needed no more than this and the sun in the lane to reassure
me.
From a warlike-looking farmer, a friend of ours living at the lane’s
end, we got a low phaeton and a tall horse which we had made
occasion to use before. The drive to Chynmere occupied hardly half
an hour, and when we saw the tower of the Hall above the chestnuts
and before us the high English wall of the park cutting the roadside
sward we looked at each other in sudden breathless abashment.
After all, Lisa was Dudley Manners’ ward, not ours. After all, two
years in Europe are commonly accepted as desirable for a girl of
twenty. In that black hour as we drew rein at the lordly entrance of
Chynmere Hall itself I felt myself obliged to call up the essential
horror of the situation.
“Pelleas,” I said, “remember: they love each other as much as ever
we did. And remember: two years with an authority on plant life in
Alaska.”
“Monstrous,” said Pelleas firmly.
On which we went bravely up the steps.
Our enterprise was doomed to receive a blow, crushing and
apparently mortal. Neither Mr. Dudley Manners nor Miss Constance
Wortley was at home. They had gone away in different directions,
the man thought, immediately after luncheon.
We went back tremblingly to the low phaeton and the tall horse.
“O, Pelleas,” I said in despair. “And whatever shall we do now?
Those poor little people.”
Pelleas looked at his watch.
“We can take an hour,” he said. “We’ll give Dudley Manners or the
botanical lady an hour to get back, and we’ll call again.”
“O, Pelleas,” I said, “and if they aren’t there then let us go home and
be married anyway—” quite as if the wedding were our own.
But Pelleas shook his head.
“Dear,” he said, “we mustn’t, you know. We really mustn’t. It wouldn’t
do in the very least.”
“Pelleas,” said I irrelevantly, “we were just their age when we were
married.”
“So we were,” said Pelleas, and drew the tall horse to a walk in the
sun of the long green road, and we fell to remembering.
Any one who has ever by any chance remembered knows how
sweet the pastime may be. Sometimes I think that heaven must be a
place where some of the things that have been will be again. No
wonder that as we drove on our delayed mission for those two who
sat expectant and adoring in our rose garden, a throng of phantoms
of delight came about us and held us very near. No wonder that the
tall horse, obeying his own will, took this road and that road, leading
us farther and farther in those fragrant ways until at last where the
highway ran through a little hollow at the foot of a forbidding hill he
stopped altogether, minded to take the tops of some tender green,
cool in the shade. I recall the ditches of yellow sweet clover and the
drone of the honeybees.
The hollow was on the edge of Chynmere village. Across the green
we saw the parish church, white in its elms and alders. I noted
absently that a smart trap and a satin horse waited outside the iron
fence and that several figures were emerging from the chapel door
where the white-haired rector lingered.
“We can ask those people,” suggested Pelleas, “for the shortest cut
back to the Hall. I’m afraid the time is getting on.”
He gathered up the lines and drove leisurely across the springing
turf. A song sparrow was pouring out its little heart from the marsh
land beyond the church and the sounds of the afternoon were
growing every moment more beloved. Everything was luring to
delight, and here were Pelleas and I alone of all the world—save
Dudley Manners and this Miss Wortley—seeking to postpone a great
happiness.
“Dudley Manners,” said I out of the fullness of my heart, “must be a
kind of ogre. And as for this Miss Wortley, I dare say she is a regular
Nichola.”
At this Pelleas said something so softly that I did not hear and drew
rein beside the smart trap in which a man and a woman coming from
the church had just taken their places. And when I looked up I saw
the man turning toward us a face so smiling and so deliciously
abashed that it bewildered my recognition, until—
“Dudley Manners!” cried Pelleas. “The very man I am searching the
county for.”
And to this Dudley Manners said:—
“I say, Pelleas—you’re a bit late—but how in the world did you
guess?”
“Guess?” said Pelleas, puzzled. “Guess you?”
“Guess where—I should say guess what. Did you know I
telephoned?” said Dudley Manners all at once; and then having
leaped from the trap and bent above my hand he turned to the lady
who had sat beside him, an exquisite elderly woman with a lapful of
fresia. “This is Mrs. Manners,” he said with charming pride. “The fact
is, we’ve just been married in the chapel there.”
At this my heart leaped to a thousand tunes all carrying one happy
air.
“You see,” he was explaining, looking up at us with an eagerness
almost boyish in his transfigured face, “we—we decided rather
suddenly. And we telephoned over to you an hour ago to get you to
come and stand by us—”
“Telephoned to us—at the lodge?” I cried in dismay. “O, who came to
the telephone?”
Dudley Manners looked as if he wondered what that had to do with
his happiness.
“I really don’t know,” he said. “The voice was familiar. I thought at
first it might have been you, Etarre. And then they cut us off; and
then a terrible voice thundered that neither of you was there. How
did you know what we wanted?” he went back to his text.
But as for me I could think only of the terror of those poor little
people, and I could guess that Nichola must some way have come to
the rescue. I knew her voice over the telephone, like all three voices
of Cerberus, saying, “Not at home.”
“Dudley,” said I faintly, “Pelleas—tell him. Ask him.”
I gave Dudley Manners my hand and got to the ground, trembling,
and crossed to the trap where the lady was so tranquilly seated, with
the fresia in her lap. I said insane, unremembered vagaries to her, all
the time listening to that murmur beside the phaeton and knowing
that the fate of our little lovers was being decided then and there.
And suddenly it came to me that the face in which I was looking was
uncommonly sweet and kindly and that inasmuch as she was Mrs.
Manners and a bride I might give her my confidence and win her
heart for my hope. But when I turned boldly to tell her something of
the charming case she was holding out to me some sprays of her
fresia.
“Won’t you have this?” she said. “It is a very rare species.”
And then I knew her and I marveled that I had not understood at
once. This—this would be no other than Miss Constance Wortley, the
botanical lady herself. And in the same instant to quicken my
assurance Dudley Manners, laughing deliciously, called softly to her:
—
“Constance—Constance. It’s all right. Lisa and Eric are bound to be
married to-day and I fancy you’ll have to take me to Europe alone!”
Ah, such a moment of tender, abashed laughter and open rejoicing.
And of course Pelleas and I opened our hearts and told them where
the lovers were, and who had doubtless answered the telephone at
the lodge. And forthwith we invited them to drive with us to the
wedding, and to have tea in the garden. And so it was settled, and
away we went down the golden road dipping between deep, deep
green, and boldly past the tower of Chynmere Hall and through the
gracious land of afternoon back to Little Rosemont lodge, bearing
the glad tidings to usher in the glad event. Tea or cream sherbet,
what a world this is always turning out to be.
“We will go in and explain,” I cried—how I love to explain when best
things are true—“and then, Pelleas, you must hurry over in the
phaeton for Mr. Didbin, and bring him back with you, no matter what.
And then we will be married—in the drawing-room or the rose arbour
or the garden at large.”
I love to recall the pleasure of that alighting at the lodge gates, of
going within, of looking across the roses for the two whom we were
to surprise. I caught a flutter of white in the arbour and, palpitating, I
led the way past the pool and the fountain and the trickling outlet
where a scarlet wing flashed into flight and past the Hundred-leaved
rose, to the turn in the path that led to the arbour.
Then without warning, outside the arbour entrance there seemed to
rise from the gravel the amazing figure of Nichola—Nichola in her
best black gown and embroidered white apron and an unmistakable
manner of threatening us with folded arms. She stood squarely
before us, looking at Pelleas and me with all the disapproval of those
little, deep-set, quick-lidded eyes.
“Now, then,” she said grimly, “go back. The weddin’s on.”
In the same instant, through the low-arched doorway of the arbour, I
saw Lisa and Eric and the questioning, distressed face of the
Reverend Arthur Didbin.
Nichola followed my glance.
“It’s none o’ his doin’,” she explained shrilly. “It’s my doin’. We knew
who was on the telephone, well enough. She answered it herself,”
she explained, with a jerk of her shoulders toward the arbour, “an’
near fainted in my arms. She knew him. An’ we knew what was like
to happen when he got here. I went quickly, quickly for the minister
an’ here he is. You must not interfere. It is not holy!”
Nichola, that grim old woman, as the ally and not the adversary of
Love! But I had no time to marvel at the death of either prejudice or
reason.
“Nichola—but Nichola!” I cried breathlessly, “we haven’t come to
interfere. We don’t want to interfere. We were going to send for Mr.
Didbin ourselves.”
At that Nichola drew back, but doubtfully, with mutterings. And she
did not disappear until little Lisa, having seen the radiant faces of our
bride and groom, suddenly understood and ran to them. And as for
Dudley Manners, one would have said that his dearest wish had
been to see Lisa married to Eric Chartres; and as for Mrs. Manners,
with her kind eyes, all her fresia scattered in the path as she kissed
Lisa, I think that she cannot even have noticed our Hundred-leaved
rose or cared whether it had come to us from its native Caucasus or
her own Alaska.
I protest that I cannot now remember whether Lisa and Eric were
married by the fountain or in the rose arbour or in the garden at
large. But I know that it must have been out of doors, for I remember
the roses and how the sun was slanting madly in every direction and
butterflies were vanishing against the blue.
And when it was over and we sat in the gracious afternoon talking
joyously of what had happened and of how strangely it was come
about and of how heavenly sweet the world is, there came Nichola
from the house bearing to the table in the little arbour a tray
unmistakably laden with her cream sherbet and with mounds of her
delicate cake.
“Nichola!” I cried as I hurried to her. “You did make it?”
Nichola looked at me from her little deep eyes.
“I made it, yes,” she said, “an’ that was why I went for the minister.
I’d begun it, an’ I wasn’t going to have it wasted. It would not be
holy.”
It is true that Nichola can use the same argument on both sides of a
question. But I have never been able to see the slightest objection to
that if only the question is settled properly at last.
XVI
“SO THE CARPENTER ENCOURAGED THE GOLDSMITH”
They were all to spend Christmas eve with us, our nearest and
dearest. On Christmas day even the kinfolk farthest removed, both
as to kin and to kind, have a right by virtue of red holly to one’s
companionship. But Christmas eve is for the meeting of one’s
dearest and they had all been summoned to our house: The
Chartres, the Cleatams, Miss Willie Lillieblade, Hobart Eddy, Avis
and Lawrence, and Enid and David and the baby. As for Viola and
Our Telephone and Lisa and Eric they were all in Naples and I dare
say looking in each other’s eyes as if Vesuvius were a mere hill.
There was to be with us one other—Eunice Wells, who was lame.
She was in New York on the pleasant business of receiving a
considerable legacy from a relative, a friend of ours, whose will,
though Eunice had previously been unknown to Pelleas and me,
endeared her to us.
“To my beloved niece, Eunice Wells,” the testament went, “I give and
bequeath This and That for her piety, her love of learning and her
incomparable courage in bearing sorrow.”
Was not that the living May breathing in a rigid and word-bound
instrument of the law? And what a picture of Eunice Wells. Pelleas
and I had sought her out, welcomed her, and bidden her on
Christmas eve to dine with us alone and to grace our merry evening.
At five o’clock on the day before Christmas, just as Pelleas and I
rested from holly hanging and were longing for our tea, Hobart Eddy
was announced. I say “announced” because we usually construe
Nichola’s smile at our drawing-room door to mean Hobart Eddy. She
smiles for few but to Hobart she is openly complaisant, unfolding
from the leather of her cheek an expression of real benignity.
“How very jolly you look,” he said, as we sat in the ingle. “Holly over
the blindfold Hope and down the curtains and, as I live, mistletoe on
the sconces. Aunt Etarre, I shall kiss you from sconce to sconce.”
“Do,” said I; “of late Pelleas is grown appallingly confident of my
single-minded regard.”
“Alas,” Hobart said, “nobody wants to kiss me for myself alone.”
On which he put back his head and sat looking up at the blindfold
Hope, wreathed with holly. And his fine, square chin without threat of
dimple, and his splendid, clear-cut face, and his hand drooping a
little from the arm of his chair sent me back to my old persistent
hope. Heaven had manifestly intended him to be a Young Husband.
He of all men should have been sitting before his own hearth of holly
and later making ready the morrow’s Yule-tree for such little hearts
as adore Yule-trees....
Suddenly Hobart Eddy looked over at us and, “I say, you know,” he
said, “what do you think it is all for?”
“The holly?” Pelleas asked unsuspectingly.
“The mistletoe?” I hazarded.
“No, no,” said Hobart Eddy with simplicity, “everything.”
Pelleas and I looked at each other almost guiltily. Here were we two,
always standing up for life and promising others that it would yield
good things; and yet what in the world could we say to that question
of Hobart’s, fairly general though it is: “What is it all for?”
Pelleas spoke first, as became the more philosophical.
“It’s to do one’s best, wouldn’t one say?” he said, “and to let the rest
go.”
“Ah, yes, I see,” said Hobart Eddy, talking the primal things in his trim
staccato, “but it’s so deuced unnatural not to know why.”
“Yes,” Pelleas admitted, “yes, it is unnatural. But when one does
one’s worst it gets more unnatural than ever.”
Hobart Eddy looked critically at the fire.

Chinas Technology War Why Beijing Took Down Its Tech Giants Andrew Collier Full Chapter PDF

Uploaded by

Copyright:

Available Formats

You might also like

Chinas Technology War Why Beijing Took Down Its Tech Giants Andrew Collier Full Chapter PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chinas Technology War Why Beijing Took Down Its Tech Giants Andrew Collier Full Chapter PDF

Uploaded by

Copyright:

Available Formats

China’s Technology War: Why Beijing

Took Down Its Tech Giants Andrew

Seeing the Unseen: Behind Chinese Tech Giants' Global

Brazil and the United States during World War II and

Dante John Took

Overreach: How China Derailed Its Peaceful Rise Susan

Geography of Technology Transfer in China: A Glocal

The New Cold War, China, and the Caribbean: Economic

Yours for the Union: The Civil War Letters of John W.

The Devil and All (1934) John Collier

ISBN 978-981-19-3041-6 ISBN 978-981-19-3042-3 (eBook)

Cover illustration: © Melisa Hasan

This book required an understanding of a number of areas, including

Pokfulam, Hong Kong Andrew Collier

Abstract This chapter outlines the beginning of the technology crack-

Keyword Jack Ma · Alibaba · Common prosperity · IPO · Ant

© The Author(s), under exclusive license to Springer Nature 1

When Jack Ma, the billionaire founder of Chinese e-commerce company

Culture and Tourism, which proceeded to impose restrictions on minors

redefinition of cultural life in China. These companies had built reputa-

• Ride-hailing: CAC launched a cybersecurity review of Didi and

The crackdown was also coming at an opportune time. At the 20th

• Aggressive “regulatory catchup” by Beijing ministries in Beijing.

• Rewrite the social contract with the Chinese people. No longer

a minuscule portion of average income. There has also been a renewed

The larger issue is that the challenges of running an economy that

Common Prosperity: Vision or Campaign?

Keywords Distribution of income · Communist Party · Wang Huning ·

© The Author(s), under exclusive license to Springer Nature 11

campaign to promote economic growth through backyard steel furnaces

2021). One important liberal economist, Zhang Weiying, also launched a

• “Financial Risk” was mentioned 14 times, not much less than

Much of Common Prosperity falls in line with Xi’s longstanding

narrowed. The Gini-coefficient, one widely used measure of inequality,

credit where the economy was generating growth—not necessarily where

digital projects; train 1 million rural governance and agricultural officials;

programs were directly under the Common Prosperity umbrella or coin-

Batson, Andrew. What Xi Jinping Thinks About Development Economics.

The Bureaucracy Strikes Back

Abstract The speech by Jack Ma instigated a new era of regulation

Keywords CBIRC · Zhou Xiaochuan · Ant financial · Financial risk ·

© The Author(s), under exclusive license to Springer Nature 27

This was a distinct change from recent history. The regulators in

This use (or misuse) of extra-legal methods to enforce government

In September 2021, in an article published in the People’s Daily,

of the Communist Party was attaching great importance to antitrust,

companies, Tencent and Alibaba, were summoned to Beijing for a sepa-

posed a threat to the central government’s plans for a digital currency.

grandparents, or other extended family, WeChat Pay is able to see into

bank granted 27 online payment companies licenses to operate online

However, in fear of what the balcony of roses would think of our

“My own, confirm me! If I tread

You might also like