And it involves a high level power struggle 

within the Chinese Communist Party

Welcome to China Uncensored, I'm Chris  Chappell. And boy do I have a doozy of  

an episode for you today. But remember,  YouTube is demonetizing us all the time.  

The only reason I can bring you these  episodes is thanks to the support  

of viewers like you on the crowdfunding website  Patreon. Head over to Patreon.com/ChinaUncensored,  

and for as little as a dollar an  episode, you can help me make this show.

Now as you may remember,  one of China's richest men,  

Jack Ma, disappeared for three months  after criticizing state regulators.

Generally the Chinese Communist Party doesn't  take criticism well. And during the time Ma was  

“disappeared,” the Communist Party blocked  the IPO of Ma's company Ant Financial.

That IPO would have been worth  over 300 billion dollars.

Now Ma has recently been  appearing in public again. 

But it turns out there was much more to this  story than what was previously reported.

The Party didn't block Ant Financial's IPO just  because Jack Ma criticized Chinese regulators.

I mean, that didn't help. But it was also  about a deadly battle for power between rival  

factions within the Chinese Communist Party  itself. And you know what that means. It's  

time for another episode of everyone's favorite  Communist Party soap opera, General Hostility.

Previously on General Hostility: Chinese leader Xi Jinping  

is locked in a desperate bid for power. His  enemies—a rival political faction tied to former  

Chinese leader and human toad hybrid Jiang Zemin.  Jiang's connections spread out like a spider web  

throughout China, waiting to ensnare Xi  Jinping. And this time the bait...is an Ant.

That's right, it turns out Jack Ma and Ant  Financial have some pretty close ties to  

Jiang Zemin's faction. And that could be the real  reason Xi Jinping blocked Ant Financial's IPO.

Because according to the Wall Street  Journal, Xi personally blocked the IPO.

You know, that time Jack Ma did a cringe-worthy  Michael Jackson impersonation on stage—turns  

out, it wasn't the most ill-advised  decision he's ever made after all.  

At least when he says that Billie  Jean is not his lover, I believe him.

Anyway, back to less disturbing topics,  like Communist Party factional infighting.  

More than a dozen Chinese officials and government  

advisers secretly spoke to the Wall  Street Journal for this article. 

They told the Journal of “a previously  unreported central-government investigation”

...that found through an opaque  web of investment structures,  

that some of Xi Jinping's biggest enemies were  heavily invested in Ant Financial. And they all  

stood to make billions of dollars from the IPO.  That is, until Xi Jinping (Corner Box) stopped it.

It turns out the grandson of  former Chinese leader Jiang Zemin,  

Jiang Zhicheng, was a major  investor in Ant Financial.

But it was well hidden. But  I'll uncover it after the break.

Welcome back. Jiang Zhicheng was a  major investor in Ant Financial—but  

here's how it was hidden. Jiang Zhicheng cofounded  a company called Boyu Capital. Then Boyu Capital  

set up this subsidiary in Shanghai. Which then put  money into a private equity firm called Beijing  

Jingguan Investment Center. And it was that  company that finally invested in Ant Financial.

It's like six degrees of Kevin  Bacon, but with investment firms  

that funnel millions of dollars  to China's corrupt elite. 

The Beijing Jingguan investment firm eventually  got “a nearly 1% stake in the company,  

according to Ant's IPO document, putting  it among its top 10 shareholders.”

However, in Ant Financial's official documents,  

there's no mention of how Beijing Jingguan  relates to Jiang Zhicheng or his other companies.

But it turns out Jack Ma and  Jiang Zhicheng go way back.

In fact, Jiang Zhicheng played a big role  in making Jack Ma one of China's richest  

men. It has to do with a deal that gave Ma more  control over another company Ma created, Alibaba.

Back in 2012, Zhicheng led a  group of some of China's biggest  

state-linked investment firms to help Ma  buy out half of Yahoo's stake in Alibaba.

And that chunk of Alibaba, “soared in value when  

the company listed on the New York  Stock Exchange two years later.”

So a lot of people tied to Jiang Zemin  

made a lot of money. But the connections between  Ma and Jiang Zemin go beyond Jiang's grandson. 

I'll tell you more after the commercial break.

Welcome back.

Why did Xi Jinping block the IPO of Ant Financial?  According to the Chinese officials who secretly  

spoke to the Wall Street Journal, Xi Jinping  had little interest in having the Ant IPO  

funnel enormously lucrative financial  stakes to his political enemies.

And it was much more than just Jiang Zhicheng,  the grandson of former Chinese leader Jiang Zemin.

Also secretly invested in Ant Financial was the  son-in-law of a powerful retired Party official  

in Jiang Zemin's faction. This is Jia Qinglin.  He's a former member of the Politburo Standing  

Committee, the most powerful group of men in  China. He was very close with Jiang Zemin. 

Well, Jia Qinglin's son-in-law is Li Botan.  He controls the Beijing Zhaode Investment  

Group. And through a series of different  companies, he invested big in Ant Financial.

This is not the first time Li Botan and  Xi Jinping have gone to blows either.  

Li owned a fancy private club for Communist Party  elite called the Maotai Club. Xi was not a fan.

“Events like those held by Mr. Li's Maotai Club  were seen by [Xi Jinping] as harmful to the party.  

'You people, you either eat and  drink yourselves into the grave,  

or die between the sheets,' he said at a meeting  with senior officials earlier in his tenure.”

Somehow I get the feeling Xi just  wasn't invited to the parties.

But these kinds of complicated political  connections are just how business is done  

in China's corrupt system. China's  economy may look like capitalism,  

but it's not a free market. It's actually  under heavy Communist Party control.

It wasn't just people tied to the Jiang faction  that got rich through investing in Ant Financial.  

Plenty of other rich and powerful Chinese  elite also had a stake. And Ma also  

encouraged investment from Chinese state-run  investment funds, too. Which was a smart move. 

See, Jack Ma became successful, not  through his ideas and hard work alone.  

No, he was only able to make  it because in the process,  

he made well-connected Party leaders rich as well.  He was able to avoid a lot of regulatory pressure  

on Ant Financial by giving state backed companies  and powerful individuals a stake in the company.

“Having such 'strategic investors' on  board—all poised to profit from the IPO—helped  

Ant's stock-listing application  sail through various levels of  

securities regulators last summer...The  application was approved in a month.”

Of course, if you find yourself on  the wrong side of a power struggle,  

those same connections end up hurting you.  The Chinese Communist Party can take away  

the promise of a free market based on  its political whims. That's because  

it was never a free market in the first place.  It was always Party controlled. And it can  

also take away your personal freedom,  and make you vanish anytime it wants.

Now, I'm not saying that Jack Ma and Ant  Financial's connections to the Jiang faction  

are the only reason that Xi  Jinping blocked Ant's IPO. 

From the Chinese regime's point of view, there  were other problems, like the fact that Ant  

Financial was making money from people's data  but not sharing that data with the government.

And it was making loans and selling financial  products without having to meet the same  

requirements as a bank. Basically, it could  make money off of financial transactions,  

while state-run banks actually supplied the  money for the loans and took on most of the risk.

So if people couldn't pay back  those Ant Financial loans,  

it's actually the state-run  banks that would be in trouble. 

But adding the fact that the  Ant Financial IPO would enrich  

the close relatives of his political enemies,  

well I'm just going to guess that cancelling it  wasn't a really hard decision for Xi Jinping.

In any case, the situation with Ant Financial  shows pretty clearly all of the deeply entrenched  

ways that Chinese Communist Party officials  and their relatives are getting rich in China.  

But what will the aftermath be? 

Chinese leader Xi Jinping stopped his enemies  from getting rich quick. Well, from getting even  

richer, quick. And China's highest paid Michael  Jackson impersonator got burned in the process.  

So what happens next? Will the Jiang faction try  to get back at Xi Jinping for making them less  

rich? Will they try to get rid of Xi entirely?  Find out next time, on General Hostility.

And now, as a thank you to everyone who's  joined the China Uncensored 50 cent Army  

and supports China Uncensored on Patreon,  I'll answer one of their questions.

Today's question comes from Lunar Worx  “Hey Chris, what does Matt do off screen?  

Is he there for comic relief, or just  to do all your top secret research?”

Oh that's a good question Lunar Worx. Obviously I  can't mention all the top secret stuff Matt does.  

Or it wouldn't be top secret. 

But Matt does a lot for the show.  Why, he's recording me right now.  

He also helps manage our team and  keeps everything running smoothly.  

About the only thing he doesn't do is help  water the plants. That's my job. And of course,  

he's the one we make watch things like the Hunter  Biden sex tapes. And we all know how that went.

He's sacrificed a lot for this show. 

So thank you Lunar Worx and all the 50 Cent Army  

for supporting the show. So we can  make Matt do all kinds of things.

Once again I'm Chris Chappell.  Thanks for watching China Uncensored.