US mulls adding China's Ant Group to trade blacklist
The administration of US President Donald Trump is considering adding China’s Ant Group to a trade blacklist, according to two people familiar with the matter.
The State Department has submitted a proposal to do so before the financial technology firm is slated to go public, Reuters reported on Wednesday.
It is unclear though when the End User Review Committee, which decides whether to add a firm to the so-called Entity List, would review the matter. The committee includes the departments of State, Defense, Energy and Commerce.
This comes as China hardliners in the US administration are trying to send a message to deter American investors from participating in the initial public offering for Ant Group. The value of the dual listing in Shanghai and Hong Kong would be in the region of a record $35 billion.
According to a spokesperson for Ant, the Alipay payment app is presently not available for American users in the United States, yet officials in the Trump administration fear the Chinese government could gain access to sensitive banking data belonging to future US users.
In 2018, a powerful security panel called the Committee on Foreign Investment in the US (CFIUS) stopped its $1.2 billion bid to buy Moneygram - a money transfer company - due to national security risks.
In a recent statement to Reuters, Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd 9988.HK, said that only 5% of the company's business is carried out outside China.
The Trump administration uses the entity list, which makes it harder for US companies to sell high-tech items to blacklisted firms, to punish Chinese companies, although its real-world impact is sometimes questionable.
While restricting access to US technology badly affects companies such as Chinese telecoms giant Huawei Technologies, its impact on a fintech giant like Ant Group might be more symbolic and does not preclude American investors from taking stakes in the firm.
Ant is China's dominant mobile payments company, which offers loans, payments, insurance and asset management services via mobile apps. The company, which is located in the eastern Chinese city of Hangzhou, is 33% owned by Alibaba Group Holding Ltd BABA.N and controlled by Alibaba founder Jack Ma.
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