Breaking News
Investing Pro 0
💎 Access the Market Tools Trusted by Thousands of Investors Get Started

Exclusive: Trump administration to consider adding China's Ant Group to trade blacklist - sources

Published Oct 14, 2020 02:32PM ET Updated Oct 15, 2020 05:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Employee stands next to the logo of Ant Financial Services Group at its headquarters in Hangzhou 2/2
 
C
-0.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GS
-0.50%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JPM
-1.74%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CSGN
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MS
-0.63%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BABA
+1.40%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Humeyra Pamuk, Alexandra Alper, Karen Freifeld and David Shepardson

WASHINGTON (Reuters) - The U.S. State Department has submitted a proposal for the Trump administration to add China's Ant Group to a trade blacklist, according to two people familiar with the matter, before the financial technology firm is slated to go public.

It was not immediately clear when the U.S. government agencies that decide whether to add a company to the so-called Entity List would review the matter.

The move comes as China hardliners in the Trump administration are seeking to send a message to deter U.S. investors from taking part in the initial public offering for Ant. The dual listing in Shanghai and Hong Kong could be worth up to a record $35 billion.

The latest swipe at China also comes in the run-up to the Nov. 3 election, in which U.S. President Donald Trump, trailing in the polls against his Democratic rival Joe Biden, has made a tough approach to China an important foreign policy platform.

While the Alipay payment app is currently unavailable for American users in the United States, according to a spokesperson for Ant, Trump administration officials fear the Chinese government could access sensitive banking data belonging to future U.S. users.

A powerful security panel known as the Committee on Foreign Investment in the United States (CFIUS) stopped its $1.2 billion bid to buy the money transfer company Moneygram in 2018 over national security risks.

The State Department did not respond to a request for comment. Ant, an affiliate of Alibaba (NYSE:BABA) Group Holding Ltd (HK:9988), declined to comment but in a recent statement to Reuters emphasized that only 5% of the company's business is outside China.

"China opposes the U.S. abusing the concept of national security and its national power to oppress foreign countries. This is a bullying practice," Chinese foreign ministry spokesman Zhao Lijian said in a regular briefing on Thursday.

"China will continue taking necessary measures to safeguard the legitimate rights and interests of Chinese companies," he said.

The entity list, which makes it more difficult for U.S. firms to sell high-tech items to blacklisted companies, has become the tool of choice for the Trump administration to punish Chinese companies, though its real-world impact is sometimes questionable.

While curbing access to U.S. technology deals a blow to companies like Chinese telecoms giant Huawei Technologies, which was added in May 2019, its impact on a fintech giant like Ant is likely to be more symbolic and does not prevent U.S. investors from taking stakes in the firm.

The administration has been largely loathe to use tougher tools against China, such as freezing assets in the United States, which many attribute to Treasury Secretary Steve Mnuchin's dovish stance on Beijing.

Ant is China's dominant mobile payments company, offering loans, payments, insurance and asset management services via mobile apps. Ant is 33% owned by Alibaba and controlled by Alibaba founder Jack Ma.

Ant's Alipay payment platform, like Tencent's WeChat platform, is used primarily by Chinese citizens with accounts in renminbi. Most of its U.S. interactions are with merchants accepting payment from Chinese travelers and businesses in the country.

Senator Marco Rubio, who has successfully urged the Trump administration to pursue investigations of Chinese companies, called last week for the U.S. government to consider options to delay Ant's IPO.

The impact of such blacklisting on firms seeking an IPO is evidenced by the failure of Chinese artificial intelligence firm Megvii Technology to clear a hearing with the Hong Kong exchange last November, en route to a planned listing of $500 million.

The exchange sought more information from Megvii, including details of its suitability for a Hong Kong IPO, after the United States put it on a trade blacklist in October.

The U.S. End User Review Committee, which decides which companies to add to the list, includes the departments of State, Defense, Energy and Commerce. Defense and Commerce declined to comment while Energy did not respond to a request for comment.

The Hong Kong leg of the IPO is being sponsored by China International Capital Corp, Citigroup (NYSE:C), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS). Credit Suisse (SIX:CSGN) is working as a joint global coordinator. Goldman Sachs (NYSE:GS) is also involved.

However, approval for the IPO has been delayed. On Tuesday, Reuters reported China's securities regulator is probing a potential conflict of interest in Ant's planned stock listing.

Exclusive: Trump administration to consider adding China's Ant Group to trade blacklist - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (8)
Immi Vest
Immi Vest Oct 15, 2020 7:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What did Trump accomplish in the past 4 years? A market bubble, nothing else. This is the weakest US ever.
Joanna Yin
Joanna Yin Oct 15, 2020 6:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Excellent idea to hurt US company's operation in China. Can't imagine if these company can't use Ant's service in China. '
Space Lord
Space Lord Oct 15, 2020 6:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This this is a good idea. Ban it !
Jody Raymond
Jody Raymond Oct 15, 2020 5:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
China has “no legitimate right” to our financial markets. The above statement by Chinese foreign ministry spokesman Zhao Lijian is laughable
TJ Theodore
TJ Theodore Oct 15, 2020 5:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Chinese Communist Party wants to know everything about you, so they can control you. President Trump is not going to let that happen on his watch.
Ricardo Indradjaja
Ricardo Indradjaja Oct 15, 2020 4:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This is a bully move by Trump. Ant is a Chinese company, going public in China, and doing 95% of its business in China. What the **** is trump doing? This is meddling with someone else's business.
Randall Wagner
Randall Wagner Oct 15, 2020 12:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
if you can't trade fair.. steal ...that's competing? , sounds like a dem logic. China has a camp ready for shane.
Vincent Sheu
ShaneS Oct 15, 2020 12:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When you can't compete, sanction your rivals. Trump's formula.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email