Alice Su - ‘Just spend’ and ‘just borrow,’ Jack Ma told China’s youth. Then came the bill

 Jack Ma risked damaging the Chinese economy by tempting young people into getting too much in debt. It's interesting how the more conservative Chinese blame the individual for taking on too much debt rather than Jack Ma's Ant Group's easy money. 

When I was 17 years old I was amazed to find out that the government limited the pay out from slot machines to about 85%. I thought this meant big profits for gambling companies, but then I found out how a higher pay out causes addiction, leading to many people becoming financially ruined and mentally destroyed. Companies actually campaigned for higher pay outs from gambling machines because this actually increased their profits. 

I'm all for the government protecting people from self harm, and for reining in the companies and individuals that seek to exploit them. 

[Jack Ma] has embodied China’s technological prowess for two decades. The scheduled $34-billion stock debut of Ma’s fintech company Ant Group last fall would have been the largest in history. It had been celebrated as a sign of China’s bounce back from the pandemic and entrepreneurial success.

But Ma went too far. His controversial speech in October 2020 at a forum in Shanghai criticized China’s risk-averse financial regulators while many of their top officials sat before him. Such public defiance crossed a red line; regulators suspended the IPO two days before its scheduled date. Chinese leader Xi Jinping himself reportedly ordered the shutdown. Ma vanished from public sight for almost three months.

The message was clear: Big Tech and Big Finance must be reined in. Capitalists should not be given free license in China.

A surprising audience agreed: China’s youth. Many of the “ants” born since the 1990s no longer worship figures such as Ma. Coming of age in a slowing economy under constant pressure to consume, they are suspicious of capitalism and the inequality it spawns. They share reports of tech worker deaths and delivery drivers trapped by algorithms. They use Ma’s products, but are disdainful of his mantras

A video that went viral after the IPO shutdown explained that Ma’s risky model of pwsackaging and reselling loans is similar to the U.S. home mortgages that caused the 2008 recession. Others featured movie clips of desperate American shoppers, warning that consumerism  would make China’s youth “slaves.”

*********

Last June, Wang lost her job. She had 40,000 renminbi — about $6,100 — in debt and no income for several months. She took out new loans to pay old loans. Soon, debt collectors were calling and texting by the dozens.

“I was afraid to open my eyes when I woke up in the morning. Sometimes my heart beat so fast I felt unable to breathe,” Wang said. Ashamed to face her family, she considered suicide. “That was the first time I felt how painful it is to live.”

Others blame individuals, not Ma’s companies, for irresponsible borrowing.

Los Angeles Times

Alice Su - ‘Just spend’ and ‘just borrow,’ Jack Ma told China’s youth. Then came the bill