Alibaba is One of China's Most Important Aircraft Carriers & Ant Group is in the Battle Group.
Close on the heels of commissioning its first home built aircraft carrier, the Shandong, "high resolution photos...show for the first time...China's third carrier (under construction) but the first to be equipped with modern technology. At the waterline, the new ship will be about 1,000 feet long and 130 feet wide." This, according to a Washington Post article September last. China, very clearly, means business.
Quoted in USNI News around the same time, US Admiral Christopher W. Grady (Commander, United States Fleet Forces Command) remarked, "Good on 'em. It makes the argument that carriers are important." He summed it up, "We have them. They want them and they're building them (9/17/2020)."
Aircraft carriers, and their all-important battle groups ("ecosystems", as Adm. Grady aptly characterizes the mighty package) long have been platforms for projecting military power into areas of contention, and taken by many as symbols of national power and prestige. America, being who we are, have 11 nuclear powered fleet carriers. In some circles, that constitutes an overabundance of riches and serious study has been conducted to consider shrinking the fleet. The US Navy is sailing at near-flank speed toward innovative manned and unmanned ships that reflect modern ideas for the American fleet. In perfect military-bureaucratic idiom, a Navy spokesman barked, "We will not comment on a DoD product that is pre-decisional (Defense News, 4/20/2020)." Pre-decisional? Bold italics were added for obvious reasons, but name withheld to protect the utterer.
Which brings us around to China. To Alibaba Group. To Ant Group. As we wrote earlier, China means business, if it means anything at all.
At present, the spheres of ecommerce and financial markets have merged, propelled as they were by natural innovation and accelerated adoption during this horrific moment of global pandemic. Governments have printed money out of thin air and central banks have scooped it all back up after cycling through consumers, businesses and investors.
Cruising the market tailwinds and financial currents of fiscal and monetary stimulus, America's publicly-traded "carrier" group does not memorialize US presidents; rather, they have names like Facebook, Apple, Amazon, Netflix, Google. Even Tesla and Microsoft. They don't hoist national flags, they print stock exchange tickers.
These companies, once lauded and now excoriated by many, are nonetheless sources of national pride and global economic power. As much as China has achieved relevance and respect in military and geopolitical realms, it is nowhere near where it wants or needs to be economically. Internally and externally, China needs global financial influence, and the ability to reap the attendant rewards. China's economy is large and beefy, but in many ways still inelegant.
Surely this explains the fitful effort China calls its "Belt and Road Initiative", designed to economically encircle (ensnare?) more than two-thirds of the world's population in a potentially catastrophic debt-trap (January 2020 Backgrounder published by the COUNCIL on FOREIGN RELATIONS). Tellingly, this initiative was originally named "One Belt One Road," or OBOR by its acronym (Wikipedia), making it feel more like a Chinese version of "my way or the highway" in developmental economics. Smart change. Softer is better.
If OBOR is envisioned as a global government sponsored enterprise (GSE) by China (for China?), then Alibaba Group must be its privately owned, publicly traded projection of economic power. It's a metaphorical aircraft carrier. It presents as less threatening then, say, the other "carrier" named Huawei, but it is just as important across the full and deep range of China's self-interests.
So, when the grasp of 2020 is finally broken by the promise of 2021, we think it's a safe bet that a stock market listing for Ant Group will be pulled from the grips of annoyed Chinese regulators, political leaders, and party apparatchiks. The unexpected dustup that scuppered Ant's highly valued IPO was a moment when China's leaders were playing to its two important audiences, it's own citizens and the world. China will engage, but only on its own terms and in its own time.
"Recently, we at Ant Group have spared no effort in studying the 14th Five-Year Plan, and the government's policy insights into financial security and financial stability," Ant Group's chairman read from his speech to those assembled at the Fourth China Internet Forum. With that solution in hand, Ant Group will make its way to its manifest destiny. It must be ship-shape to join China's fleet of interconnected symbols making a case for relevance, influence, and deference.
Just remember, relevance and influence can look like mere paste in the presence of deference--always considered the crown jewel of statecraft.
Very Important Note: In as much as this commentary references potential transactions and corporations, whether private or public, it is for discussion & entertainment purposes only. We use only information already in the public domain and frame any evaluation as speculative only. Accordingly, nothing in this discussion is to be construed in any way or in any venue as a recommendation or reliable forecast. As always, all investing carries risk and can lead to loss of all capital. No action should be taken in any event based on this discussion. It is inadequate to address all the potential risks and does not purport to be authoritative on any level.