Jack Ma, China’s most successful businessman, is attempting to stay out of the spotlight. He’s drawing and doing tai chi, according to his friends. He also exchanges sketches with Masayoshi Son, the Japanese conglomerate SoftBank’s billionaire CEO. Last week, at a simulated board meeting of the Russian Geographical Society, Ma was seen for the first time in months by the rest of the country. Ma could be seen leaning his head on one knee, looking bored, as President Vladimir Putin and others debated Arctic affairs and leopard survival.
It’s a stark change of pace for Ma, the dynamic visionary who first demonstrated how China can rock the world in the digital era two decades ago; whose profile adorns shelves of admiring business books; who has never seen an audience, he couldn’t razzle-dazzle. China has disciplined and shamed a series of tycoons who accumulated immense riches and power but were seen to overstep their limits under the Communist Party’s top official, Xi Jinping. Beijing’s biggest priorities yet are Ma and the crown jewels of his online empire, Alibaba and the fintech behemoth Ant Group, as officials begin to regulate the country’s dominant internet industry.
For years, policymakers in the United States and Europe have been trying to reel in internet behemoths. However, it’s difficult to picture Western regulators causing such a dramatic shift in fortunes as Ma has seen. Xi has taken a firm grip on China’s private sector, placing a premium on loyalty to the party and social stability over benefit. In 2017, Xiao Jianhua, a valued financial lieutenant of many Chinese elites, was kidnapped from a high-end Hong Kong hotel. Wu Xiaohui, whose insurance firm purchased the Waldorf Astoria Hotel in Manhattan, was arrested, as Ye Jianming, an oil tycoon was looking for contacts in Washington. Wu was sentenced to jail afterwards. This year, Lai Xiaomin, a former chairman of a financial company, was executed.
According to Richard McGregor, a senior fellow at the Lowy Institute and author of “The Party: The Secret World of China’s Communist Rulers,” “the general iron law is that there should be no individual centres of influence outside of the party.” Beijing’s anti-tech crackdown is now reverberating through boardrooms outside Alibaba’s.
Simon Hu, the CEO of Ant Group, resigned in March. Colin Huang stepped down as chairman of Pinduoduo, the mobile bazaar he created and took public a few years ago, a few days later. Pinduoduo declared his departure on the same day as Alibaba announced it had drawn 788 million shoppers in the previous year. Pony Ma, the founder of the social network behemoth Tencent, suggested stricter regulations for internet businesses — or, as an official newspaper put it, “innovative methods of control and governance” — at a political meeting that month.
China’s antitrust regulator summoned 34 leading internet firms last week to discuss new fair-competition laws. They were debating business improvements and openly promising to remain in line within hours. “These new rules will force internet companies to reconsider how they innovate in the future, which may lead to less innovation,” said Gordon Orr, a nonexecutive board member at Meituan, a Chinese food distribution giant. Nonetheless, Alibaba and other internet behemoths enjoy a status in China, that could shield them from the harshest treatment. Also, as they tighten oversight, officials have lauded the titans’ economic contributions. Xi wants China’s economy to be dominated by domestic developments rather than the whims of international powers. That means it’s possible, it’s too early to call Jack Ma a loser.
“His business is much more important than any other entrepreneur’s to the growth and functioning of the Chinese economy,” McGregor said. “The government needs to keep reaping the profits of his enterprise, but just on their terms. Alibaba would not be nationalised by the government. It is not seizing its properties. It’s simply restricting the scope of its operations.” Alibaba did not respond to requests for comment. Ma is no stranger to working with Chinese officials. Until founding Alibaba in 1999, he worked for a short time at a government-run advertising firm, where he was unhappy. Ma proved deft at entertaining government officials at a time when China was only getting used to the notion of strong private entrepreneurs.
