Jack Ma, the most famous businessman that China has ever produced, avoids the spotlight. Friends say he paints and practices tai chi. Sometimes he shares drawings with Masayoshi Son, the billionaire head of the Japanese conglomerate SoftBank.
The wider world has Mr. Mom first seen in months past during a virtual board meeting of the Russian Geographical Association. While President Vladimir V. Putin and others discussed the Arctic issues and the conservation of leopards, it can be seen that Mr. Mom rests his head on one side and looks deeply bored.
For mr. Mom – the charismatic entrepreneur who for the first time two decades ago showed how China would shake the world in the internet age; whose face adorns shelves of admiring business books; who never met a crowd, but he could not blind – it is a strong change of pace.
Under the leader of the Communist Party, Xi Jinping, China has punished and shamed a series of tycoons who have amassed enormous wealth and influence but are seen as exceeding their limits. Mr. Mom and the crown jewels of its online empire, e-retail titan Alibaba and fintech giant Ant Group, are Beijing’s biggest targets yet, as officials begin to regulate the country’s powerful internet industry like never before.
U.S. and European officials have been restraining Internet access for years. But it’s hard to imagine that Western regulators are bringing about a change in happiness that is as important as the one that Mr. Mom was overwhelmed. Mr. Xi claimed wide control over China’s private sector, demanding that he be committed to the party and to social stability over profits.
Xiao Jianhua, formerly a trusted financial lieutenant for many Chinese elites, was snatched from a luxury hotel in Hong Kong in 2017. Ye Jianming, an oil magnate looking for connections in Washington, was detained, as were Wu Xiaohui, whose insurance company bought the Waldorf Astoria Hotel in Manhattan. Mr. Wu was later jailed. Lai Xiaomin, the former chairman of a financial firm, was executed this year.
“The general iron rule is that there should be no individual centers of power outside the party,” said Richard McGregor, a senior fellow at the Lowy Institute and author of “The Party: The Secret World of China’s Communist Rulers.”
Beijing’s fight against technology is already sweeping through council chambers outside Alibaba’s.
Ant Group CEO Simon Hu resigned in March. A few days later, Colin Huang resigned as chairman of Pinduoduo, the mobile bazaar he founded and announced within a few years. Pinduoduo announced the same day that he had resigned, attracting 788 million buyers over the past twelve months – a larger number than Alibaba.
At a political meeting this month, Pony Ma, founder of social media giant Tencent, proposed stricter rules for internet companies – or, as an official newspaper put it, ‘innovative methods of regulation and governance’.
Last week, China’s antitrust authority convened 34 top Internet companies to discuss new rules for fair competition. Within hours, they discussed business changes and publicly promised to stay in line.
“These new regulations require Internet platforms to look ahead to innovate, and the result may be less innovation,” said Gordon Orr, a non-executive board member at Meituan, the Chinese food giant.
Nevertheless, Alibaba and other internet titans have a status in China that can protect them from the heaviest treatment. Officials praised the titans’ economic contributions, even as they intensified surveillance. Mr. Xi wants China’s economy to be driven more by its own innovations than by those of fickle foreign powers.
That means it might be too soon to declare Jack Ma for the score.
“His business is far more important to the success and functioning of the Chinese economy than any other business,” he said. McGregor said. ‘The government wants to continue to reap the benefits of its company, but on their terms. The government is not nationalizing Alibaba. It does not seize its assets. It simply limits the field in which it operates. ”
Alibaba declined to comment.
Mr. Mom is not inclined to deal with the authorities in China.
He worked briefly and unhappily for a government agency before setting up Alibaba in 1999. China at the time was still getting used to the idea of powerful private entrepreneurs, and Mr. Mother was skilled in charming government officials.
“Alibaba has absolutely the opportunity to grow into a world-class company,” said Wang Guoping, then the Communist Party secretary of the eastern city of Hangzhou, where Alibaba is based, in the 2000s. ‘What a world-class company needs most is a soul, a commander, a world-class businessman. I believe Jack Mom meets this standard. ”
Mr. Mom saw early on what success can bring to China, said Porter Erisman, an early CEO of Alibaba.
“There was only one person in the business who brought it to our attention that one day we would have problems being so big that we would come under pressure because we had too much market power,” he said. Erisman said. “And it was Jack.”
Mr. Mom expressed his concern at a staff meeting in the mid-2000s, Mr. Erisman said. At the time, he added, most Alibaba employees ‘just tried to think,’ How are we ever going to make money? ‘
In 2011, Mr. Mom got a taste of how her ambitions could rub shareholders and regulators wrong. He quietly took over Alibaba’s payment service, Alipay, and angered one of Alibaba’s biggest investors, Yahoo. Mr. Mom said it was necessary according to new Chinese regulations. Alipay later became Ant Group.
“The Alipay transfer encouraged him,” said Duncan Clark, who said Mr. Ma has known and chaired BDA China, a consulting firm, since 1999. “He got away with it a little bit.”
As Alibaba grew, Mr. Mom starts courting by presidents and movie stars, but also by a wider range of fellow Chinese entrepreneurs. This ‘echo room’ can Mr. Mom’s ideas about himself and his position with the government have distorted, Mr. Clark said.
Otherwise he would have seen the writing on the wall, especially since Mr. Xi encouraged private enterprises to work more closely with the state.
When Mr. Ma resigned as chairman of Alibaba in 2019, a commentary in the official newspaper of the Communist Party stated: ‘There is no so-called Jack Ma era; only Jack Ma is part of this era. ‘
China’s leaders need the private sector to sustain economic growth. But they also do not want entrepreneurs to undermine the dominance of the party in society.
When Ant was in public last year, Mr Ma spoke at a conference in Shanghai and criticized China’s financial regulators. He has long seen Ant as a means of disrupting the country’s major state-owned banks. But there could hardly have been a less suitable moment to address the matter. Officials stopped Ant’s share list shortly afterwards.
In China, “it is difficult to say that the emperor has no clothes these days,” said Kellee S. Tsai, a political scientist at Hong Kong University of Science and Technology.
Mr. Mom also largely disappeared from view in his businesses. According to a person who saw the message but was not authorized to speak in public, he appeared in an internal chat group in January to answer a business question. Employees later told Mr. Mom’s message shared to reassure nervous colleagues.
Recently, the Shanghai research group Hurun Report estimated that Mr. For the first time in three years, Mom was not one of China’s three richest people. The country’s new no. 1 was Zhong Shanshan, the humble head of a bottled water giant and a pharmaceutical company.
When his water business went public last year, Mr. Zhong so little known that Chinese news reports about his sudden wealth had to explain to readers how to pronounce the obscure Chinese character in his name.