Whearing the burgundy lipstick and a long peroxide wig, the small businessman who would soon become China’s richest man sat on the boards and Can You Feel the Love Tonight? from Disney’s The Lion King.
Jack Ma, CEO of e-commerce giant Alibaba, has earned the right to make a spectacle of himself. On that day in September 2009, the eccentric but zealous former English teacher, in front of 16,000 adoring employees, celebrated at the Yellow Dragon Stadium in Hangzhou. He built a bona fide technology champion, and China’s response to Amazon, eBay and PayPal is one.
Less than a decade later, Ma is experiencing a much less triumphant moment in the spotlight. After nearly three months in which he was not known, after a public disagreement with Beijing, he reappeared last week, apparently very disciplined.
According to a member of a large online forum of China analysts, his 48-second appearance – in a broadcast from an unknown location – was ‘like a hostage video’.
Alibaba remains a powerhouse of the Chinese business scene, but Ma has had her wings clipped, after taking the bold and perhaps foolish step of crossing the Communist Party, of which he is a member.
“I do not understand what he was thinking,” said Bill Bishop, who writes for the China-focused newsletter Sinocism. “It is not constructive in the Chinese system.”
During a summit in Shanghai last October, Ma criticized the attitude of regulators towards large companies, accusing them of a “pawn shop” mentality that stifles innovation. “We should not use the way to run a train station to regulate an airport,” Ma declared. “We can not regulate the future by yesterday’s means.”
He spoke just moments after Judge Wang Qishan told China’s leader Xi Jinping the opposite. Wang stressed the priority of safe regulation to ensure that affairs do not become the master of the state.
‘[Ma’s speech] was to take risks, put your neck at risk and not bother about the instability that results from it, ”says George Magnus, a research fellow at the Oxford Center in China and the author of Red flags: why Xi’s China is in danger. “This is an anathema of the philosophy of Xi Jinping’s party.”
Ma’s direct contradiction of Beijing’s rhetoric went viral on social media, contributing to the potential embarrassment for the Communist Party. He may have been worth more than £ 35 billion, but it soon became clear who the boss was.
Within two weeks, the entrepreneur and two of his lieutenants were called to meet with financial regulators. A day later, the looming stock market flotation of Ant Group – an online finance company spun out of Alibaba and including the digital payment system Alipay – was canceled.
Regulators call “changes to the regulatory environment of financial technology and other important issues”, but the prevailing story was that Ma was punished at the expense of Ant Group’s initial public offering (IPO). Shares in Alibaba, which owns part of Ant, fell more than 8%, reducing Ma’s net worth by more than £ 2bn. Authorities in Beijing also ordered an investigation into allegations of “monopolistic practices” in Alibaba – as well as co-technology firm Tencent – and later ordered Ant Group to reduce its operations.
Bishop agrees that there are sincere reasons for concern about the way Alibaba uses commercial power and its handling of workers. There is also, he believes, serious concern among regulators about the systemic risk inherent in Ant’s model of creating numerous small loans. But the idea that Ma’s public disagreement was not at the basis of the latest intervention in the Ant Group fleet is ‘crazy’, according to Bishop.
“It’s China, it’s the Communist Party – it’s always political. He basically embarrassed the vice president and the regulators … four days later his IPO is pulled.
‘If it was merely regulatory concern, why would it lead to IPO? It’s pretty obvious that his speech was somehow the trigger that day. ”
Rumors abound that it was Xi personally who pulled the plug. Magnus, who mapped Xi’s government style, emphasizes the constant march of his regime away from the flirtation with ‘marketing’. Instead, Xi’s China moved to a Leninist ideological approach, instituted via the “United Front” network of enterprises and groups whose interests must be in line with those of the party.
“Jack Ma happens to be one of the most popular and well-known people who has the new anxiety of the leadership about people getting too big for their boots and powers that seem to be competing with the authority of the party itself,” he says. . “If entrepreneurs comply politically, they will prosper. If they do not comply, they will not thrive and will be subject to the kind of treatment that Jack Ma was just the victim. ”
During the three months that Mom went missing, speculation abounded. Some said the 56-year-old fled the country, others that he had only a low profile and was seen on the golf course. The rumor mill accelerated when he was suddenly replaced as a judge in the TV talent show Africa’s business heroes.
The fact that Ma reappeared raised Alibaba’s shares by 8.5% on the day the video of him was confirmed as genuine, but his return did not necessarily resolve issues.
In the video, which was dated January 10 but released last week, Ma did not devote herself to matters of regulation and affairs, but to uplifting China’s rural poor. “My colleagues and I have learned and thought, and we are more determined to dedicate ourselves to education and public welfare,” he said, addressing teachers at a rural school.
According to him, he concluded that Chinese entrepreneurs should spend their time on ‘rural revival and common prosperity’ – both important parts of the Xi agenda.
Magnus points out that it is impossible to know if Mom is in some form of detention. Its current location is also uncertain. And the fact that his businesses have become so much of the everyday financial transactions for many Chinese people cannot protect him.
‘Should they be careful with him? Some might think so because his elevated position is a bit like Bill Gates or someone like that. To be honest with you, if the party was really anxious about him and his influence, I would not think they would bother him about it. ”
Domestic and foreign investors were not only bruised by the failed flow of Ant Group, but also reminded of what is expected of them. “Early last summer, we started hearing a lot more about what Xi’s vision for private entrepreneurs is and how it fits into the goal of the great rejuvenation he’s demanding,” Bishop said.
‘Xi raised patriotic entrepreneurs from the previous century who made a lot of money and then did a lot for the country and a lot for the party. The politically savvy business people see this as a changing political wind to which they need to be more sensitive. ”