Ant Group, the financial technology giant controlled by billionaire Jack Ma, has agreed to a sweeping restructuring proposal that would transform it into a financial holding company to be overseen by China’s central bank and subject to the same regulations that govern China’s traditional banks.

The overhaul was announced Monday after Ant’s top executives were summoned to a meeting in Beijing with officials from Chinese regulatory agencies in charge of banking, securities, and foreign-exchange. Following the meeting, the Peoples Bank of China issued a statement announcing that Ant would apply to become a financial holding company.

The PBoC praised Ant executives for developing, under regulator supervision, a “comprehensive, viable rectification plan.” The new structure will dramatically increase Ant’s capital costs, limit its ability to offer some of its most lucrative financial services, and force investors to reassess the venture’s value. Even so, Ant praised the proposal, and pledged to “spare no effort in implementing the rectification plan, ensuring that the operation and growth of our financial-related businesses are fully compliant.”

Ant’s forced revamp is the latest in a series of moves by Chinese regulators to rein in Jack Ma’s business empire—and demonstrate Beijing’s resolve to tighten government control over the nation’s burgeoning technology sector. For global investors, the key question is whether regulators will be content to make an example of Ant and Ma, or intend to go after other tech giants as well.

Just months ago, Ant was flying high, preparing a dual listing on exchanges in Hong Kong and Shanghai that was expected to sell more than $37 billion in stock. The deal would have made Ant’s the largest IPO in history and would have valued the company at more than $300 billion. But in November, Chinese president Xi Jinping personally scuttled the listing after Ma mocked regulators for being too risk-averse and having a “pawnshop mentality” in a speech in Shanghai last October.

Since that speech, Ma has virtually disappeared from public view save for a brief video appearance in January, fanning rumors about China’s leaders plans to put him in his place. It has been widely speculated that Beijing will force Alibaba to sell off its extensive media holdings, including Hong Kong’s South China Morning Post. (SCMP chief executive Gary Liu reassured staff in a memo that “there are no plans for ownership change.”) The Financial Times reported last week that authorities have sought to scale back Ma’s influence by pressuring him to suspend new student enrollments at Hupan University, the elite business academy he operates in his hometown city of Hangzhou.

On Saturday, China’s anti-trust regulator announced that it had fined Ant’s sister-company, e-commerce behemoth Alibaba Group Holding, a record $2.8 billion for abusing its market position to the detriment of competitors and consumers. China’s State Administration for Market Regulation said Alibaba had retaliated against merchants who sold goods on rival platforms in addition to Alibaba’s own.

The fine was equivalent to 4% of the company’s $72 billion in domestic annual sales—less than many had feared. Alibaba said it accepted the penalty “with sincerity,” and seemed almost grateful for the punishment.

“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said in an open letter. “For this, we are full of gratitude and respect.”

Ma, who co-founded Alibaba in 1999, stepped down as chairman in 2019, but still owes a sizable stake in the company. Alibaba owns a third of Ant.

Duncan Clark, chairman of Beijing-based tech consultancy BDA China and author of a book on Alibaba, told Reuters he believes Saturday’s settlement “should draw a line” under anti-trust issues for Alibaba—but did not imply absolution for Ma or Ant. Markets seemed to embrace that view. Alibaba’s shares surged 6% on Monday and held those gains in Hong Kong trading today.

But the rest of the sector remains in jeopardy. Shares of other Internet giants—including Tencent Holdings, e-commerce powerhouses JD.com and Meituan Dianping, TikTok owner ByteDance, and search leader Baidu—have come under pressure in recent days. Bloomberg reports that China today ordered 34 Internet companies to rectify their anti-competitive practices within the next month “signaling that Beijing’s scrutiny of its most powerful firms hasn’t ended with the conclusion of a probe into Alibaba.”

Meanwhile, Nikkei Asia reports today that signs of a looming tech crackdown are giving Chinese startups planning to go public cold feet. Nikkei finds that on the Shanghai Stock Exchange’s tech-focused Star Market, a record 88 companies, including several high-profile unicorns, have suspended or canceled planned IPOs since the beginning of 2021.

More Eastworld news below.

Clay Chandler
– clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Eamon Barrett. Reach him at eamon.barrett@fortune.com

EASTWORLD NEWS

Resurgent

Cases of COVID-19 in India have surged beyond the country’s previous high point in September last year, with officials reporting close to 169,000 new cases on Monday—the same day that millions descended upon the Ganges to observe the Hindu festival of Kumbh Mela. India now has the second highest number of accumulated cases worldwide, surpassing Brazil and landing behind the U.S. The second wave of infections threatens to disrupt global vaccination efforts, as India restricts exports to focus on its own needs. CNN

Runoff

Japan plans to release water contaminated by the 2011 Fukushima nuclear disaster into the sea, starting two years from now. Discharging waste water into the sea is a common practice, once the water has been treated to remove most radioactive elements. South Korea and China have raised concerns over the plan and called for Japan to be transparent in its treatment process. Nikkei

Bu, Gao

The head of China’s Center for Disease Control and Prevention, George Gao, backtracked on remarks he made over the weekend claiming that the efficacy of China’s COVID-19 vaccines are “not high”—a claim that conflicted with Beijing’s narrative about its homegrown vaccines. Gao later advocated to state media Global Times that efficacy rates could be boosted by mixing vaccines. Fortune

Tried again

HSBC agreed to hand over documents requested by Huawei Technologies pertaining to the extradition hearing of Huawei CFO Meng Wanzhou, which is ongoing in Canada. Huawei attempted to obtain the documents through a court in the U.K. in February, but the request was declined by a U.K. judge. Huawei then filed a similar request in a court in Hong Kong. The hearing for the case convened on Monday but lasted just a few minutes, as both sides announced they had reached an agreement. WSJ

Super competitors

The U.S. Commerce Department added seven Chinese supercomputing firms to its blacklist of entities it considers a threat to national security. The blacklisting prohibits U.S. firms from selling components to the seven firms without first acquiring a license from the Commerce Department. The seven supercomputing firms build computers that are used by China’s military complex. Bloomberg

MARKETS AND MOVERS

Didi — China ride hailing giant Didi Chuxing has filed confidentially for an IPO in the U.S., choosing the New York Stock Exchange (NYSE). The debut is set to raise $1.5 billion and value the Uber rival at between $70 billion and $100 billion.

Trip — China’s leading online travel agency Trip—the second largest OTA in the world, behind Booking.com—is planning to raise $1.09 billion through a secondary listing in Hong Kong, which is due to launch on April 19.

Kakao — South Korea’s webtoon and movie producer Kakao Entertainment is considering a New York listing next year, which CEO Lee Jinsoo said could value the firm at $17.8 billion.

SK and LG — SK Innovation agreed to pay rival LG $1.8 billion plus recurrent royalty fees in order to end a dispute over alleged trade secret theft. The U.S. imposed an import ban on SK tech after the battery division of LG accused its rival of stealing secrets in February.

Yellen — Bloomberg reports U.S. Treasury Secretary Janet Yellen will decline to label China a currency manipulator, pushing the value of the yuan up 0.2% against the dollar—although the offshore currency remains 0.7% weaker overall in 2021.

Merge ahead — Indonesia ride hailing leader Gojek and local e-commerce giant Tokopedia are planning a merger, Nikkei reports. Both unicorn firms wrote to investors on Friday requesting permission to merge, but the consolidation might not occur.

FINAL FIGURE

93%

The small kingdom of Bhutan, with a population of around 735,000, vaccinated 93% of eligible adults within two weeks of launching its vaccine rollout on March 27. Overall, that equates to 64% of Bhutan’s total population, which is just shy of the 70% inoculation rate required for decent herd immunity. But the small country has only delivered its first round of doses, using AstraZeneca vaccines provided for free by New Delhi. Bhutan’s pandemic restrictions will remain in place until two weeks after second doses are delivered.