Jack Ma said that China should "not worry about financial systemic risks" and warned about "Collateralization with a pawnshop mentality" https://interconnected.blog/jack-ma-bund-finance-summit-spee... because Ant Financial was making uncollateralized loans on a huge scale, something they were only able to do because they weren't subject to the same regulations as established financial institutions, and this was about to change.

With Ant Financial being just another regulated lender, there was no way to justify their inflated valuation and by proxy the valuation of parent company Alibaba. Hence the sharp decrease in stock price.

So I think you have your causality backwards: Alibaba didn't lose value because of Jack Ma's warning, rather the "problem" with China's regulatory system he was warning about was that it was going to make Alibaba lose value.

(And invoking his advice when another financial systemic risk is rearing its head might not be the most appropriate.)

Europe tried this with Russia (fossil gas) and still ended up in a bad spot. Trade is important and can be beneficial, but one should still prepare for war if peace is desired. The mental models of some nation state leaders deviates from what one would consider logical. They won’t hesitate to burn what has been built for their goals.

The problem is that Xi hijacked the CCP. He’s now on his way to transitioning China back to socialism and a centrally planned economy.

“Socialism” but without any of the social safety nets, from what I hear. Lots of retirees getting their pensions reduced, their personal savings in the form of real estate (~75% of household wealth) sinking in value, can’t even see a doctor without waiting for months (unless paying high fees out of pocket), high debt loads both public and private, deflationary pressures, and oh, the whole population shrinkage thing in the long run. Daunting challenges even for a fearless leader that knows what he’s doing, not to mention the one they’ve got.

> Lots of retirees getting their pensions reduced, their personal savings in the form of real estate

In socialism, there’s no need for a pension. The state will decide what to distribute, how much and to whom.

> can’t even see a doctor without waiting for months (unless paying high fees out of pocket)

In socialism, you get allocated resources and services from the “community” aka state. When resources are finite, you wait in lines. We’re already seeing that in nations with socialized healthcare without a private option

> the whole population shrinkage thing in the long run

Thank you for bringing that up. All modern economic systems, socialism included, require growth.

Did Xi hijack the CCP --- or did the CCP try to hijack capitalism and Xi is just their frontman?

Prior to the most recent National Congress of the CCP, the General Secretary of the CCP and Paramount Leader of the PRC would only serve two terms of 5 years. Xi Jinping is now in his third term. He also made a show of having his immediate predecessor dragged out of the proceedings without explanation, and so Hu Jintao was unable to cast any votes.

When the voting was all said and done, Xi Jinping was retained for a third term as Chairman Winnie the Pooh; and Li Zhanusa who appeared visibly upset and attempted to help Hu Jintao until being pulled back by Wang Huning and Li Keqiang of the Hu faction were not retained for the 20th Central Committee.

In order to show Hu Jintao was not disappeared, he was later appointed to oversee the funeral proceedings of his own immediate predecessor, Jiang Zemin, over 35 other people who were ahead of him on a list of people to oversee the proceedings.

So you tell us, did Chairman Winnie the Pooh here hijack the CCP or is he just their frontman?

That's an interesting question. The Economist attempted to answer it with their series "The Prince" (https://www.economist.com/theprincepod), and I believe their conclusion is that Xi has indeed consolidated power around himself and is nearly an autocrat at this point. Two provisos on this, however:

- The author, Sue-Lin Wong, is something of an outsider, and outsider reporting on China typically misses some subtleties of the real situation in the country.

- Given the nature of China, there will never be a fully autocratic leader there, though it may appear that way to some, and the would-be autocrat might be deluded into thinking they are.

That was their hope that Xi would be an easily controlled puppet. If that was the case, it would still be business as usual without the giant messes of Wolf Warrior diplomacy, the ending of one China two systems policy, and the kidnappings of Jack Ma and other capitalist elites which has led to decoupling and a mass exodus of said elites and as many assets as they can take.

Xi is not their front man. Xi is now their ruler who wants to regress China back to Mao’s system.

The CCP also adopted capitalism. I don't see how they hijacked it.