China’s biggest e-commerce provider, Alibaba Group, is extending its digital payments—and information gathering—into southeast Asia.
With a planned majority ownership of the 2C2P payments network, Alibaba’s Ant Group will increase its global payments reach, particularly in Singapore, Thailand, and Malaysia.
That’s a threat to America, because China’s financial services expansion in southeast Asia will make it more difficult for countries there to decisively break from Beijing’s increasingly powerful gravitational pull.
On April 18, Alibaba’s Ant Group fintech unit announced a “strategic partnership” with 2C2P, which will “accelerate digital payment adoption and innovation.” According to the statement, “The partnership, upon completion, will see Ant Group becoming the majority shareholder of 2C2P.”
In 2020, the Trump administration issued a warning against Alibaba and other Chinese national cloud providers, “to prevent U.S. citizens’ most sensitive personal information and our businesses’ most valuable intellectual property … from being stored and processed on cloud-based systems accessible to our foreign adversaries.”
The data will likely be used not only for standard financial credit scores, which Ma sought to use it for, but to tune China’s social credit scoring system, which uses social network data and measures of political loyalty to the regime. Those with bad social credit scores are denied the ability to purchase airline and train tickets, for example.
2C2P is spreading throughout Asia, Europe, and the Americas as well, according to its website, which lists “international and local card schemes, digital wallets and QR payment providers, over 400,000 alternative payment (APM) points, including convenience stores, kiosks, and ATMs, over 45 currencies worldwide, and over 30 financial institution partners markets.”
Angel Zhao, president of Ant Group’s International Business Group, said in the announcement, “We look forward to supporting businesses’ digitalisation together and creating a connected digital ecosystem across markets in the region.”
All of this to say that Alibaba appears to be getting a little too big for comfort, when that comfort relies on living in a world in which the most powerful multinational corporations are not beholden to an increasingly totalitarian dictatorship.
According to Reuters, U.S. regulators could force Alibaba “to take measures to reduce the risks posed by the cloud business or prohibit Americans at home and abroad from using the service altogether.”
The same could be said for Alibaba’s expanding international payment systems.
American allies in southeast Asia and elsewhere should consider banning Alibaba’s reach into their private financial lives. That should now include 2C2P and all other companies that will be majority-owned by Alibaba and its units.
Every day, it should be clearer to the United States and allies that the Beijing-Moscow axis intends to rule the world through violent measures like the invasion of Ukraine and Taiwan. Allowing these dictatorial regimes to expand their power and information theft through any means—including the control of financial payments networks and the financial information gathering that these networks allow—should be forbidden by international and domestic laws.
On the issue of Alibaba’s cloud computing “services,” there should be little question about how China’s companies manage to steal up to $600 billion worth of American intellectual property annually. Perhaps it has something to do with a lack of government protection that, for example, allows our biggest American companies to hand over their IP on a virtual silver platter, and pay for the privilege of doing so.
