| Ant Group Chairman Eric Jing had a humble message to deliver this week: we're ready to change. Addressing the 4th China Internet Finance Forum a month after regulators halted the fintech giant's $35 billion IPO, Jing said the company was "looking into the mirror, finding out our shortcomings and conducting a body check-up."  Eric Jing during a Bloomberg Television interview from October 2019 Photographer: Qilai Shen/Bloomberg That's a notable shift from late October, when Ant co-founder Jack Ma used a speech at a different forum to accuse global financial regulation of stifling innovation. A lot has happened since then. Chinese policymakers have let it be known they intend to tighten regulatory scrutiny of Ant and other corporate behemoths that have come to dominate the country's internet sector. The scuttling of Ant's initial offering leaves little question about how determined they are to do so. Since then, there have also been some indications of how that oversight might be exercised. This week, Alibaba and Tencent were each fined just over $76,000 for having failed to properly seek approval for acquisitions they completed several years ago. China's top anti-monopoly agency also announced that it's reviewing Huya Inc.'s proposed acquisition of rival DouYu International. The deal would combine the dominant companies in China's market for live-streaming of video gaming. Tencent, China's biggest gaming company, is a shareholder in both Huya and DouYu and would have about 68% of the merged business's voting shares. Beijing is not alone in taking a closer look at acquisitions. Facebook was sued last week by U.S. antitrust officials who are seeking to unwind its purchases of Instagram and WhatsApp. Indeed, one of the few things governments around the world seem to agree on is that technology companies have gotten too big. Given the circumstances, taking a look in the mirror seems a wholly appropriate thing for tech giants everywhere to be doing at the moment. IPO SurgeChinese companies have raised a record $129 billion through initial public offerings and secondary share sales this year. That's more than a third of all such fund raising worldwide in 2020, the highest proportion since 2009 when the global financial crisis sapped listings on American exchanges. And that's without Ant Group's suspended $35 billion IPO. One factor driving this surge has been the flood of liquidity central banks around the world have released to try and limit the economic damage from Covid-19. Another has been Beijing's decision to accelerate reforms at home that have made it easier for companies to sell shares to the public. They've combined for a powerful one-two punch.  Trade SpatAustralia's relationship with China has worsened precipitously in the past few months. In the latest sign of deterioration, Canberra announced this week that it will challenge tariffs imposed by China on its barley exports through the World Trade Organization. And more could follow. After the Global Times, one of China's more nationalistic newspapers, reported that China had given local power plants the green light to import coal, except from Australia, Australian Prime Minister Scott Morrison said such a ban would be a breach of WTO rules. Taking disputes to the global trade body is by no means a perfect solution. They can take years to resolve and have the potential to complicate any negotiations toward a diplomatic settlement. Whatever hope there was for a quick resolution to this dispute is looking dimmer by the week. Building BlocksLike many of the world's best-known brands, Lego has made a big bet on China. What's unusual is the emphasis the Danish toymaker has put on brick-and-mortar stores in helping it win over the country's consumers. By the end of 2021, the number of Lego-branded stores in China will have doubled from 2019 to 300 outlets in 85 cities. The rational is simple. Most Chinese consumers have never played with Lego's plastic bricks, meaning there is little connection with the brand. "We need to get bricks into the hands of more kids," explained Cindy Chiu, who oversees the company's retail operations in Asia. There are also other prongs to Lego's strategy of course. It's expanding aggressively online. In three years, the company will also open a Lego theme park in southwestern China. There are even classes that feature Lego as a way to develop creativity in school children. And so far things are going well, with sales in China increasing by double-digits, significantly outpacing Lego's global growth.  What We're ReadingA few other things that caught our attention: And finally: There won't be a Next China newsletter for the next two weeks because of the Christmas and New Year holidays. We'll be back with a new edition on January 8, 2021. | 
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