Juwai.com, a website that markets residential properties around the world to mainland Chinese customers, has announced a partnership with JD.com, China’s second-most-famous ecommerce company.
- The tie-up “will enable JD’s 292.5 million customers to research and buy property online more easily, by allowing them to browse and view real estate listings for properties from the US, Australia, Canada, and the UK directly on JD.com,” according to Juwai’s press release.
- After a period of tightened capital controls, “Chinese leaders now appear increasingly relaxed about cross-border capital flows amid a more stable economy and a weaker US currency,” says the Financial Times (paywall), suggesting that Juwai and JD might benefit from pent-up demand.
- However, Chinese property buyers may face new restrictions abroad. The FT notes that “some countries, including New Zealand, are looking at laws to restrict foreigners from buying homes.”
- JD beat “the other mega Chinese website Alibaba to the venture,” says the Australian Financial Review (paywall), noting that Alibaba had said “during its launch in Australia last year it considered putting apartments online.”
- The first Australian properties to go on sale on JD.com will be apartments at a “resort-style development” at Surfers Paradise on the Gold Coast, starting from $360,508 (AU$470,000).
Chinese homeowners and immigrants are an increasingly noticeable feature of many Western cities, especially in the English-speaking world. Their money, their culture, and their customs will affect the economies, education systems, housing prices, and urban cultures across the globe. JD.com just accelerated that process.
The government can squeeze fintech companies where it hurts
Ant Financial, a company affiliated with Alibaba and its founder, Jack Ma 马云, is “the world’s biggest fintech firm,” according to Bloomberg, and it “may have a problem”:
- Ant Financial offers consumers small loans “to meet surging demand from cash-strapped millennials buying everything from iPhones to hairdryers.”
- To finance all those consumer loans, the company makes heavy use of Asset Backed Securities (ABS). To simplify: Ant bundles up the debts of all its customers into packages, and then resells those packages to investors.
- “The micro-lending driving such debt sales, though, has increasingly been in the crosshairs of regulators,” Bloomberg says. Online lending platforms have been “criticized for sometimes high interest rates and underhanded lending practices,” and the profusion of fintech companies in the last few years has caused the government to worry about systemic financial risk.
- The government “stepped up requirements for deleveraging” in December, making it more difficult for Ant to raise money to finance its consumer lending.
Ant Financial and Alibaba can take a few regulatory or financial hits without much worry. The most negative quote on Ant in the Bloomberg story is from an industry analyst who says that “Ant Financial’s golden days of taking advantage of easy money from the debt market probably won’t return anytime soon,” and that the declining issuance of ABS “may even hurt the company’s profits” (emphasis mine).
So Ant will be fine, but we can expect ever-stricter regulation of fintech companies, and state-led pressure on their sources of funds. The government is watching, with some apprehension, the rise of Tencent and Alibaba as financial powers. A new phase in the interminable dance between regulators and the internet giants has begun.
- China’s blockchain ambitions are revealed in the sheer number of patent applications / Quartz
- China central bank will launch crackdown on virtual currencies / Reuters
- China’s leaders approve rules to rein in $15 trillion asset management sector / Reuters
Correction: 38.1 percent of Chinese women have cheated — survey
Yesterday, we noted a new survey that indicated that more than 70 percent of Chinese divorce cases in the past two years were filed by women, and that domestic violence was cited in 15 percent of divorce cases. We also presented data from a different survey done in China, showing that about 60 percent of male respondents had cheated on their partners in a relationship, while the rate among female respondents was “about 30 percent.” That was an erroneous approximation: The survey indicates that 38.1 percent of women said they had been unfaithful to their partner.