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Chinese authorities announced last Friday a 7.12 billion yuan ($984 million) fine for Ant Financial, bringing to an end a two-year regulatory overhaul of the company.
The penalty is one of the largest fines ever given to an internet company in China:
It's the third largest fine ever, after the 18.2 billion yuan fine imposed on Alibaba, and the 8 billion yuan fine on Didi Chuxing.
这是继阿里182亿、滴滴的80亿之后，史上第三大罚单 [1]
In what looked like a carefully orchestrated and tightly controlled media plan, Ant responded to the government announcement with a gushing statement:
We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance.
对收到的处罚决定书诚恳接受、坚决服从，并将进一步夯实合规治理水平。
U.S.-listed shares in Ant's affiliate, Alibaba Group, rose 9% after the announcement. Earlier in the day, its Hong Kong shares had jumped by 6.4% before losing some gains by the end of the day.
Financial markets commentators in China suggest this jump in share price is not unexpected:
This means that the listing plan, which has been parked for nearly three years, will be restarted.
这意味着搁浅近三年的上市计划将重新启动。[1]
As part of the punishment on the company, three business units within Ant were closed down or divested:
借呗 jiè bei - Cash Now
花呗 huā bei - Check Later
相互宝 xiānghù bǎo - Mutual Bao
These apps offered micro loans and insurance products directly to consumers, which should be regulated as financial products.
So, no surprise they’ve been closed down!
Later on the same day, another government announcement revealed TenPay (财付通 cái fù tōng), a payment service provider owned by Tencent, was also fined:
After punishing Ant, the regulator subsequently issued nearly 3 billion yuan of fines to TenPay. The intention of the regulator is clearly to tell the market that the problem of Ant is not an individual issue, but a common problem that is seen across the sector.
处罚蚂蚁之后，监管随后就对财付通开出了近30亿罚单。监翁之意无非就是告诉 市场，蚂蚁的问题不是个性问题，而是共性问题。 [1]
And finally, and as is often the case with big China news stories, there's some good word play in the media:
Ant Financial has finally surrendered today.
蚂蚁，这次终于要金服了。 [1]
This is a play on the characters in Ant’s name (金服 jīn fú), which sound the same as "today" (今 jīn) and "surrender" (服 fú).
That’s completely lost in translation!
So that's what we explore this week!
Favourite Five
1. 服 fú
to surrender, to submit
蚂蚁，终于金服了 - Ant Financial has finally surrendered. [1]
Note: A play on words, taking the 服 from 蚂蚁金服, which is the same character but means something completely different: service vs surrender.
Related:
马已今服 mǎ yǐ jīn fú - Jack Ma has submitted to the much more powerful government
A further play on the characters of Ant Financial and Jack Ma’s name, which was a popular phrase around the time of “that speech”. The characters for Ant (蚂蚁 mǎ yǐ) are replaced with “Jack Ma” (马 mǎ) and “already” (已 yǐ).
2. 鸡肋 jī lèi
chicken's ribs; something of little value, but discarding it seems a waste
此前就已经被责令叫停的伪保险业务，对于蚂蚁来说，本就已经是鸡肋 - For Ant Group, the pseudo insurance business that had been ordered to stop was already considered something of little value. [1]
3. 傻白甜 shǎ bái tián
naive, simple-minded, easily fooled
显然傻的是我们这些傻白甜 - Obviously, it is us who are naive and easily fooled. [1]
Note: An internet slang word.
4. 靴子落地 xuē zi luò dì
the other shoe drops; the point when something decisive happens
中国互联网产业或许将在蚂蚁靴子落地后，迎来新的发展机会 - Perhaps the Chinese internet industry will usher in new development opportunities after the moment of truth for Ant Group. [3]
Note: This is originally from an American idiom, “wait for the other shoe to drop”. It means to await an inevitable event, normally bad, to finally happen. Read more in this week's China Project Phrase of the Week.
5. 利空出尽是利好 lì kōng chū jìn shì lì hǎo
the market receives a boost after all the bad news is out
这其中的逻辑，恐怕只能用一句话来解释，那就是利空出尽是利好 - The logic behind this can probably be explained in this sentence: When all the bad news is out, the market is reassured. [1]
More: This is a technical saying used in the context of stock markets in China.
Related: 利空 lì kōng - negative factors
Consuming the Conversation
Useful words
6. 诟病 gòu bìng
to criticise, to find fault with
即使是此前广为诟病的借呗花呗，都没有受到任何影响 - Even the previously widely criticised apps, Cash Now and Check Later, have not been affected in any way. [1]
7. 玄机 xuán jī
underlying secret
通报中的罚款后面有一个括号（含没收违法所得），这才是玄机所在 - The real secret to the fine lies in the parentheses at the end of the announcement: including confiscation of illegal gains. [1]
8. 垫背 diàn bèi
to act as a scapegoat, to take the blame for someone else
不仅把鹅厂拉出垫背，还把邮储银行、人保财险都拉出来了 - Not only did they make Tencent act as a scapegoat, they also implicated the Postal Savings Bank and PICC Property and Casualty Insurance Company. [1]
Note: Same meaning as scapegoat 替罪羊 in Chinese.
9. 松绑 sōng bǎng
to loosen restrictions, to relax control
其中一个重要内容就是如何给平台经济松绑鼓劲，为下行的经济周期注入活力 - One important aspect is how to deregulate and stimulate the platform economy to inject vitality into the downward economic cycle. [1]
10. 折戟 zhé jǐ
to suffer defeat, to fail in one's endeavour
IPO折戟977天后，蚂蚁终于“上岸” - After 977 days since the failed IPO, Ant Group finally made it through. [3]
Note: A shortened version of the four-character idiom 折戟沉沙 zhé jǐ chén shā - “broken halberds buried in the sand”, a disastrous defeat.
More: 上岸 shàng àn - we have learned before. It's normally used in the context of passing a test.
11. 上扬 shàng yáng
to rise, to go up
持有蚂蚁集团33%股份的阿里巴巴股价应声上扬 - The stock price of Alibaba, which holds a 33% stake in Ant Group, rose in response. [3]
12. 约谈 yuē tán
to summon for questioning, to have a discussion or interview with
中国人民银行等四机构约谈了当时蚂蚁集团实际控制人马云、董事长井贤栋、总裁胡晓明 - The People's Bank of China and four other institutions summoned for questioning the actual controller of Ant Group at the time, Jack Ma, as well as the Chairman Eric Jing and the CEO Hu Xiaoming. [3]
Note: Normally means to be questioned by the government, also known as "invited to tea".
Three-character phrases
13. 会错意 huì cuò yì
to misinterpret, to misunderstand
如果说港股会错了意，那么美股则是在处罚之后开盘的，难道美股投资者也傻 - Some say that the Hong Kong stock market misinterpreted the situation, but then the U.S. stock market opened after the penalty, are U.S. stock investors also foolish? [1]
14. 里程碑 lǐ chéng bēi
milestone, significant achievement
