JD Technology Pulls IPO in Light of China’s Fintech Restructuring

April 4, 2021
Kevin Larkin

China is perhaps now home to the world’s most interesting and confusing global fintech market. They have one of the world’s biggest economies, and are even accelerating with fintech startups and in the cryptocurrency space. China is actually the only country currently to have a digital currency, the digital yuan, circulating through their central bank, the People’s Bank of China, and has seen large success so far in that program. However, many fintech startups would be doing much better if it weren’t for many different policy changes China has implemented to make fintechs abide by, some of these causing companies to have to restructure entirely such as Alibaba and Ant Group. Some of these changes are for the better, which are ways to regulate the rapidly growing market more to keep in safe from money laundering and to protect customers’ information, but some are harder to abide by, such as their desire to make companies conform to the Communist Party’s agenda. JD Technology initially filed for an IPO, which would make their company publicly traded, but have recently changed their minds and pulled their IPO request amidst all these recent policy changes. This goes to show that these changes are starting to have some severe adverse effects, preventing startups from receiving the funding they might need by becoming publicly traded to sustain and develop more important innovations for fintech at large.

JD Technology is a smaller part of e-commerce giant JD.com, which according to their website, “is China’s largest online retailer and its biggest overall retailer, as well as the country’s biggest Internet company by revenue.” This sets a huge precedent that these regulatory changes have industry wide impacts no matter how large the company, just as they did with Alibaba, which is also one of the world’s largest online retailers. JD Technology pulled its IPO from the application process on March 30 which they stated on the Shanghai Stock Exchange website. According to South China Morning Post, “the IPO withdrawal came a day before JD.com completed a reorganization that transferred its cloud computing and artificial intelligence operations as well as other assets worth 15.7 billion yuan (about €2 billion) to JD Technology.” This doesn’t seem to be the last time that JD Technology will attempt to file for an IPO, as reports have stated that they plan to reissue an IPO at an unspecified future date, presumably after some of China’s regulations change more in their favor.

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