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Wwith a burgundy lipstick and a long peroxide wig, the small entrepreneur who would soon become the richest man in China took the stage and belted Can You Feel the Love Tonight? by disney’s The Lion King.
Jack Ma, managing director of e-commerce giant Alibaba, had earned the right to put on a show. That day in September 2009, in front of 16,000 worshiping employees crammed into Hangzhou’s Yellow Dragon Stadium, the eccentric but iron-willed ex-English teacher was celebrating. He had built a true champion of technology, China’s response to Amazon, eBay, and PayPal into one.
A little over a decade later, Ma saw a much less triumphant moment in the limelight. After nearly three months in which it is not known where he is, following a public demonstration of dissent against Beijing, he resurfaced last week, apparently much reprimanded.
His 48-second appearance – on a broadcast from an unknown location – was “like a hostage video,” according to a member of a major Chinese analysts online forum.
Alibaba remains a powerhouse of the Chinese trade scene, but Ma has had his wings cut off, having taken the daring and perhaps foolish step to cross the Communist Party, of which he is a member.
“I don’t understand what he was thinking,” says Bill Bishop, who writes the Chinese newsletter Sinocism. “It is not constructive in the Chinese system.”
At a summit in Shanghai last October, Ma criticized the attitude of regulators towards big business, accusing them of a “pawnshop” mentality that stifles innovation. “We shouldn’t use the way of running a station to regulate an airport,” Ma said. “We can’t regulate the future with yesterday’s means.”
He was speaking moments after Wang Qishan – Chinese leader Xi Jinping’s right-hand man – said otherwise. Wang stressed the primacy of sound regulation ensuring that companies do not become the master of the state.
“[Ma’s speech] it was about taking risks, putting your neck on the line and not worrying about the instability that comes with it, ”says George Magnus, associate researcher at the China Center at the University of Oxford and author of Red flags: why Xi’s China is in peril. “It is anathema to the philosophy of Xi Jinping’s party.”
Ma’s direct contradiction to Beijing’s rhetoric has gone viral on social media, adding to the potential embarrassment for the Communist Party. He was possibly worth over £ 35billion, but it quickly became clear who the boss was.
In the space of two weeks, the entrepreneur and two of his lieutenants were summoned to meet with financial regulators. A day later, the impending IPO of Ant Group – an online finance company spun off from Alibaba that includes the Alipay digital payment system – was called off.
Regulators cited “changes in the financial technology regulatory environment and other major issues,” but the mainstream rhetoric was that Ma was being punished at the price of Ant Group’s initial public offering (IPO). Shares of Alibaba, which owns part of Ant, fell more than 8%, reducing Ma’s net worth by more than £ 2 billion. Authorities in Beijing also ordered an investigation into allegations of “monopoly practices” at Alibaba – as well as tech firm Tencent – and then ordered Ant Group to downsize its operations.
Bishop agrees that there are genuine reasons for concern about how Alibaba exercises its business power and its treatment of workers. There is also, he says, genuine concern among regulators about the systemic risk inherent in Ant’s model of issuing many small loans. But the idea that Ma’s public show of dissent was not the cause of the last-minute intervention in the Ant group float is, Bishop says, “insane.”
“It’s China, it’s the Communist Party – it’s still political. It essentially embarrassed the vice president and regulators … four days later, its IPO is withdrawn.
“If it was a purely regulatory problem, why let it go public? It’s pretty obvious that his speech that day was sort of the trigger.
Rumors abound that it was Xi personally who unplugged the plug. Magnus, who mapped out Xi’s style of government, points to his regime’s constant march away from its flirtation with “commodification.” Instead, Xi’s China has turned to a Leninist ideological approach, imposed through the network of “United Front” companies and groups whose interests must align with those of the party.
“Jack Ma just happens to be one of the most popular and well-known people who has fallen victim to management’s new angst about people getting too big for their boots and who have powers that seem to rival them. authority of the party itself, ”he said. “If entrepreneurs are politically compliant, they will thrive. If they don’t comply, they won’t thrive and will be subjected to the kind of treatment that Jack Ma just suffered.
During the three months that Ma was missing, speculation was rife. Some said the 56-year-old fled the country, others said he was just keeping a low profile and was seen on the golf course. The rumor gathered speed when he was abruptly replaced as a judge on the talent show Africa’s trade heroes.
The very fact of Ma’s reappearance caused Alibaba’s shares to climb 8.5% the day the video of him was confirmed to be genuine, but his return didn’t necessarily clear things up.
In the video, dated Jan. 10 but released last week, Ma focused not on regulatory and business issues but on uplifting the rural poor in China. “My colleagues and I have learned and reflected, and we have become more determined to dedicate ourselves to education and public welfare,” he said, speaking to teachers at a rural school.
He came to the conclusion, he said, that Chinese entrepreneurs should devote their time to “rural revitalization and common prosperity” – two key elements of Xi’s agenda.
Magnus points out that it is impossible to know if Ma is in any form of detention. Its current whereabouts are not certain either. And the fact that his businesses have become so essential to the daily financial transactions of many Chinese may not protect him.
“Should they be careful with him?” Some might think so, because his high position is a lot like Bill Gates or someone like that. To be honest with you, if the party were really worried about him and his influence, I don’t think they would have any qualms about putting him aside.
Domestic and foreign investors were not only devastated by the failure of Ant Group’s IPO, but they were reminded of what is expected of them. “From last summer, we started hearing a lot more about Xi’s vision for private entrepreneurs and how they fit into the goal of the great rejuvenation he’s pushing,” Bishop says. .
“Xi raised patriotic entrepreneurs of the last century who made a lot of money and then did a lot for the country and a lot for the party. Politically savvy businessmen see this as a changing political wind to which they must be more sensitive. “
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