Jack Ma or Ma Yun, a famous Chinese billionaire and the co-founder of Alibaba Group, is considered one of the top tech tycoons of Asia today. According to the Bloomberg Billionaires Index, Jack’s current net worth is estimated at $63.1 billion. However, the investigation by the Chinese Government triggered a sharp fall in Alibaba’s shares, by a quarter since its peak period. This all has literally wiped off $10 billion from his asset value.
Jack suddenly came in the red book of the Communist Party of China (CPC) and its leadership when he criticised the country’s regulatory system in October 2020. He referred to the Chinese regulatory system having a “pawnshop mentality” and his company AliPay is not suitable for such regressive tactics. He also blamed the current regulatory structure for stifling innovation in the country. Jack openly claimed that China’s banking regulatory system is nothing more than an “old people’s club”. Coincidentally, Jack’s public criticism came days before his company Ant Group was about to launch one of the world’s biggest IPOs worth $37 billion in Shanghai and Hong Kong. And after all these big plans, Jack has been missing since November 2020. People and his fans were surprised when he did not appear in his popular TV talent show named “Africa’s Business Heroes”. This show is made to offer an opportunity to win an award of $1.5 million by budding African entrepreneurs. In fact, the origin of the show goes back to the year 2017 when Jack was touring African continent as a Special Adviser to UNCTAD Secretary General Mukhisa and saw the potential of entrepreneurs. In the year 2018, he announced the establishment of the Africa Netpreneur Prize Initiative (ANPI) with an initial grant of $10 million to identify and award 100 Africa’s Business Heroes over the next 10 years. And the first Africa Business Heroes competition took place in Accra, the capital city of Ghana, in November 2019. And the recent one when Jack did not appear was only the second one that took place in November 2020. It’s no wonder that the Chinese authorities were not able to come to terms with the power, influence and popularity that Jack Ma enjoyed much beyond the Chinese borders.
Jack’s sudden disappearance has fuelled speculation across the world. It is feared that he could have been arrested or kept under house arrest if he has not been “missing”. The successive Chinese administrations have a long record of keeping such big personalities under “supervision”, which may mean Jack Ma is in an undisclosed jail. Thus, the Hong Kong-based The Asia Times has quoted Chinese Communist Party mouthpiece People’s Daily and stated that Jack Ma is embracing supervision. Already China’s official media outlets have started a vitriolic campaign against the business tycoon. As per the reports appearing in the People’s Daily, it is assumed that Jack’s very questioning of the Chinese system is not appreciated by the CPC bosses. In a November edition of the People’s Daily, it has been said that Jack could not have elevated his Alibaba to a global conglomerate without the support from the Government. The People’s Daily said in one of its posts: “Ma Yun is savvy but without the support of national policies, Alibaba will not be able to become a trillion-business empire”. Therefore, it is well understood that Jack Ma is expected to toe the red lines earmarked by Beijing and its subsidiaries.
Of course, business and trade are activities performed within the four walls of the society. And state being the most powerful entity of any society will always have a major role in making and remaking of business enterprises. Perhaps, Jack Ma was trying to break the CPC stronghold on business houses.
The authoritarian Chinese state is up against its own homegrown billionaire. But the moot point is why China is afraid of an individual who has throughout been there in the country? Is he capable of usurping the mighty Communist Party of China (CPC) or the state run by its leaders? Has he gone to such an extent that he could simply derail China’s financial system? There could be many more such questions which may create a ripple of unease among the power brokers of Beijing for years. China is afraid of Jack Ma because he has amassed lots of wealth and through wealth he has become very powerful. That is why he has been able to question the existing systems in China. Of course, he is not capable of overthrowing the Communist state or the CPC, because these two are all powerful and they are omnipotent.
Jack Ma’s extent of power is not sufficient enough to derail or destabilise the current financial structure in China. Still, the Chinese leaders are taking all precautionary measures so as to counter or simply stop Jack from moving beyond the party and the state.
The bullying tactics employed by Chinese President Xi Jinping is an open secret. His all-out agenda to assert his power, authority and position is not only damaging the country’s image abroad, it also heralds a disturbing signal particularly for its domestic tech giants. For Beijing, Jack’s company is displaying monopolistic behaviour. That is why the Government has launched an anti-trust investigation into Alibaba and is stepping up the scrutiny of the country’s rapidly growing internet firms. Meanwhile, China’s top market regulator called State Administration for Market Regulation (SAMR) has started a probe against alleged monopolistic behaviour by Alibaba, the online shopping portal and cloud computing giant.
The SAMR gave few details but clearly said that it would investigate the company’s practice of requiring the merchants to sign agreements that prevent them from selling products on rival platforms known as “choosing one from two”. At the same time, the People’s Bank of China stated that the country’s four financial regulators are summoning the Ant Group, Alibaba’s financial affiliate, to an emergency meeting. It is learnt that the SAMR has summoned six internet giants of China — Alibaba, Tencent, JD.com, Meituan, Pinduoduo and Didi Chuxing. And all of them were reportedly told that the agency is tightening the regulation of business practice that allows groups of people in the same community to buy bulk goods at a very low price.
In fact, this kind of a group buying business model has become very popular in the wake of the Covid-19 global pandemic as millions relied on only online shopping. As per the official release of the Ant Group, it is already cooperating with the Government regulators and claimed that it will comply with all the regulatory requirements.
Today what Beijing is doing is leveraging its economic and military juggernaut to seriously redraw the contours of world trade, security and more prominently diplomacy. And frankly speaking, it is posing a direct threat to the current status quo long established by democratic nations led by America since the end of the Second World War.
Jack Ma’s current fate will soon become as an epic tale for the international community. But for China and its leaders, it’s business as usual. These Communists are practising such regressive policies for decades now, whether it comes to capitalists, journalists, doctors, academics or even Nobel Peace laureates such as Liu Xiaobo who suffered till the last day of his life in 2017. This demonstrates how Xi Jinping and his team are marshalling all their efforts to re-establish the supremacy of the CPC and extending its clout outside China’s national frontiers. And in this process of power grab and display, many like Jack Ma might be sacrificed. After centuries of isolation and weakness, China is undoubtedly reclaiming its power and position. And to advance its goal, it is exploiting the country’s formidable economic clout to expand its geopolitical influence and maintain its iron grip on the domestic development around the country.
Finally, we need to be clear that what China is doing to Jack Ma is nothing but to have a complete control over both his assets and economic prowess. The party bosses fear that such trade czars might overthrow them and may change the power calculus in higher echelons of the country. They don’t want a corporate giant to either question or pose a challenge to their status quo at any cost.
(The writer is an expert on international affairs)