Berkshire Hathaway Inc Vice Chairman Charlie Munger hailed China’s decision to impose substantial restructuring on Jack Ma’s Ant Group, the fintech behemoth whose record US$37 billion IPO was thwarted by regulators in November. In an interview with CNBC with Berkshire CEO and billionaire investor Warren Buffett, the 97-year-old said the US should take a page from China’s book and “move in preemptively to stop speculation.”
“I don’t want the whole Chinese system,” he said in an interview broadcast in the United States on Tuesday. “But I would certainly want to have the financial component of it in my own nation.”
China’s Communist Party “done the right thing” by restraining Ma, the founder of e-commerce behemoth Alibaba Group Holding, who has been scarcely seen in public since criticizing regulators in a speech last October.
Chinese regulators halted Ant’s IPO and ordered it to transform into a financial holding company, a step that is likely to rein in some of the company’s more rogue operations.
As China tightens rules on the expanding “platform economy,” Alibaba was also punished with a record US$2.75 billion antitrust penalty.
“Communists acted responsibly. “You aren’t going to do it, sonny,” they just told Jack Ma, Munger remarked. He also lauded China’s response to the newly discovered coronavirus. China enacted stringent curfews and widespread movement restrictions, which would be unpopular in the United States. “All they did was shut the country down for six weeks.” And that turned out to be the exact perfect decision,” Munger added. The pandemic, according to Buffett, has harmed smaller businesses the most.
“I don’t know how many, but hundreds of thousands or millions of tiny businesses have been severely harmed,” he continued, “but most of the huge, enormous enterprises have overwhelmingly done OK, unless they’re in cruise lines or hotels or whatever.”
(In Bengaluru, Maria Ponnezhath and Aakriti Bhalla reported; Amy Caren Daniel and Stephen Coates edited)
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