Markets and investors react to Ant Financial fine
The boot has finally dropped, and the company can move on
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Chinese authorities announced last Friday a 7.12 billion yuan (71.23亿元) fine for Ant Group, the fintech spin-off of internet giant Alibaba.
Equivalent to a whopping $984 million, this fine ends a yearslong 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:
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 suggested this jump in share price was not unexpected:
It 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 but were not.
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 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]
The characters in Ant’s name (金服 jīn fú) are replaced with homophonic characters "today" (今 jīn) and "surrender" (服 fú).
Which is completely lost in translation.
So that's what we explore this week!
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The 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: “surrender” (and not “service”).
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” by Jack three years ago. 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]
Note: Think of this phrase the next time you are struggling to throw away that last spicy chicken wing.
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 (opposite meaning is 利好 lì hǎo)
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
罚款落地可以认为是蚂蚁的一个里程碑 - The imposition of fines can be regarded as a milestone for Ant Group. [3]
15. 风向标 fēng xiàng biāo
barometer, indicator, gauge
股市作为反应最快的风向标，迅速给出了积极的回应 - The stock market, as the fastest-reacting barometer, quickly responded positively. [1]
Idioms
16. 虚位以待 xū wèi yǐ dài
to keep a vacant seat, to await someone's arrival
如今三年过去，不知道那个688688的股票代码是否仍虚位以待？- Now, after three years, I wonder if the stock code 688688 is still awaiting someone's arrival? [1]
Note: This extremely "lucky number" would have been Ant's stock code had it listed.
17. 灭顶之灾 miè dǐng zhī zāi
a disaster that completely destroys everything, a catastrophic event
蚂蚁这样的体量，这谈不上灭顶之灾 - Given the size of Ant Group, this cannot be described as a catastrophic event. [1]
18. 目瞪口呆 mù dèng kǒu dāi
to be dumbfounded, to be astonished
为何如今蚂蚁吃下天价罚单，股价却不跌反涨，确实让很多人看得目瞪口呆 - Why is it that Ant Group, despite facing hefty fines, has seen its stock price rise instead of fall? This has left many people dumbfounded. [1]
Note: 瞪 is sometimes pronounced dēng, not dèng in colloquial Chinese.
19. 轻装上阵 qīng zhuāng shàng zhèn
to go into battle lightly armed, to adopt a nimble approach
说明轻装上阵后的蚂蚁，在投资者心目中如此仍是一头巨象 - This indicates that even after going into battle lightly armed, Ant Group remains a behemoth in the eyes of investors. [1]
20. 大起大落 dà qǐ dà luò
great ups and downs, drastic fluctuations
蚂蚁经历了从“上市”到“上岸”的大起大落 - Ant Group has experienced great ups and downs from its first IPO attempt to finally settling its account with the regulator. [3]
Note: The word play here with 上岸 and 上市 is totally lost, and untranslatable in English.
21. 摩拳擦掌 mó quán cā zhǎng
to rub one's hands in anticipation, to be eager to start
11月2日由此被称为“监管之夜”，这一夜之前，蚂蚁摩拳擦掌，准备冲击全球最大IPO纪录 - November 2nd is referred to as the "Night of Regulation," and prior to this night, Ant Group was eagerly preparing to challenge the record for the world's largest IPO. [3]
22. 暴风骤雨 bào fēng zhòu yǔ
a storm, a tempestuous situation
这一轮暴风骤雨般的互联网整顿进入尾声 - This round of storm-like internet rectification is coming to an end. [4]
Phrases
23. 雷霆之势 léi tíng zhī shì
a mighty force, a powerful momentum
外界将这次“雷霆之势”的监管与一个多星期前一场演讲联系起来 - The outside world associates this powerful regulatory action with a speech that took place one week before. [3]
24. 达摩克利斯之剑 dá mó kè lì sī zhī jiàn
the Sword of Damocles
对于蚂蚁来说，悬了近三年的达摩克利斯之剑终于落下了，整改完毕，处罚结束，未来可期 - For Ant Group, the Sword of Damocles that had been hanging over them for nearly three years has finally fallen. The future looks promising with the completion of the rectification and the end of the penalties. [1]
Note: From a well-known fable told by Cicero. The sword of Damocles represents the idea that those in positions of power always face anxiety and death. This is one of those Ancient Greek phrases that seems to get more mention in Chinese than in English. Another example we have learned in this newsletter is the Tacitus Trap (塔西佗陷阱 tǎ xī tuó xiàn jǐng).
25. 爱之深责之切 ài zhī shēn zé zhī qiè
deep love is accompanied by high expectations
由此可见，监管对于蚂蚁责之切爱之更切 - It can be seen from this that though the regulatory authorities are harsh on Ant Group, they love this company even more. [1]
Note: From a line found in the 2,000-year-old Stratagems of the Warring States (战国策 zhàn guó cè).
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