{"text":[[{"start":12.58,"text":"Beijing’s most aggressive fine on record has had the discordant effect of lifting Alibaba shares 8 per cent on Monday. "},{"start":18.834,"text":"The Rmb18.2bn ($2.8bn) penalty is the culmination of an antitrust investigation into the Chinese ecommerce giant that began in December. "},{"start":28.664,"text":"Yet any optimism that this marks the end of the probe is premature. "}],[{"start":32.87,"text":"True, the company can comfortably cover the costs. "},{"start":36.324,"text":"Alibaba has about Rmb312bn in cash and equivalents. "},{"start":40.742,"text":"The fine is equal to about 4 per cent of domestic sales in 2019. "},{"start":44.858999999999995,"text":"Furthermore, it is less than half the 10 per cent penalty possible under Chinese law. "},{"start":49.539,"text":"By international standards, it is not a record breaker either. "},{"start":53.119,"text":"In 2018, the EU imposed a $5bn fine against Google. "}],[{"start":58.599999999999994,"text":"But the full repercussions are not yet clear. "},{"start":61.492,"text":"Regulators have voiced concerns around Alibaba’s non-core businesses. "},{"start":65.547,"text":"Divestments cannot be ruled out. "},{"start":67.65199999999999,"text":"Previous acquisitions are still being scrutinised too. "},{"start":70.832,"text":"In order to remain in Beijing’s good books, Alibaba will have to boost spending on corporate good deeds and services that support small businesses in rural regions, such as Taobao Deals. "},{"start":80.67399999999999,"text":"Profit growth, already slowing, will fall back. "}],[{"start":84.97999999999999,"text":"Alibaba shares trade at 20 times March 2022 earnings, less than a third the level of rivals such as Amazon. "},{"start":91.70899999999999,"text":"The valuation discount with global peers will grow as it continues to wrestle with regulators. "},{"start":96.91399999999999,"text":"In a statement about the fine, Alibaba said it was “full of gratitude and respect” for the government’s regulation and critical oversight. "},{"start":103.66899999999998,"text":"Local tech giants know that maintaining dominant positions lies in the hands of the state. "}],[{"start":109.07999999999998,"text":"For the broader Chinese tech sector, Alibaba’s fine marks a new era of expensive supervision. "},{"start":114.88399999999999,"text":"Tencent and Baidu, the country’s dominant social media and search companies, are likely to be the government’s next targets. "},{"start":121.60199999999999,"text":"Equivalent fines would be more difficult for the pair to cover financially. "},{"start":125.41899999999998,"text":"Tencent’s 2019 revenues were similar to Alibaba’s but it has only half the cash and equivalents. "},{"start":130.862,"text":"Baidu has about a tenth. "}],[{"start":133.04,"text":"Both Tencent and Baidu have notably dominant positions. "},{"start":136.719,"text":"Baidu controls more than three-quarters of the local search engine market. "},{"start":140.512,"text":"Tencent has almost 40 per cent of the payments market and about two-thirds of local game distribution. "}],[{"start":146.92,"text":"Such success now comes at a cost. "},{"start":149.612,"text":"China’s central bank is considering a plan to set up joint ventures with local companies to oversee consumer data, which give big companies their competitive edge. "},{"start":158.004,"text":"Tech leaders can only suffer if Beijing continues to support small rivals. "}],[{"start":162.39,"text":""}]],"url":"https://creatives.ftacademy.cn/album/001092131-1618286365.mp3"}