China has dramatically turned itself into a leading business country across the globe. In a time span of just 40 years China had opened up its economy and contributed wholesome amounts to the global economy. Now in the new era of digitisation, the president of China Xi Jinping is drafting out plans to turn his country into a digital land. But this is not as easy as it looks. Xi’s ambitions have been turned down with his own idiosyncrasy of tech dominance. Yes, you are right, hey we’re talking about the forceful crackdown of Chinese authorities on the business empire of China’s business tycoon Jack ma.
China’s technology sector has been facing trimmers after the abrupt fall of the co-founder of the Alibaba group holding Ltd. Although China has been making all attempts to refill the vacancy left by Ma’s fall by pouring in trillions of dollars, nothing has actually worked. China’s struggle to create the country self-sufficient in all digital tools from software to semiconductors faces enormous hindrances. Perhaps China’s growth strategy of dominance is now turning back at the country’s economy.
The founder of a startup in Zhejiang, the home province of Jack Ma, says that he has no aspirations to achieve the success Alibaba achieved simply because of the fear of unwanted government attention while other potential entrepreneurs claim that they have stopped publicly talking about their plans to expand business overseas. Well, you may say that Jack Ma’s saga shall prove out to be a deterrent in exploring potential business tycoons in the country. Founder of research group silicon dragon Ventures Rebecca Fannin says that this incident involving Ma might be a turning point in the technology sector of the Republic of China.
However, there are a lot of proponents who support the crackdown on Alibaba and Ant group along with other Chinese tech giants. The claim that it was a move extremely necessary to chuck out the monopolistic tactics and practices so that startups could flourish which otherwise would have struggled to compete with these huge firms.
Even though this might be true for some people the fact that there are concerns over the lack of transparency in the government procedures is troublesome for many. The heavy-handed suppression of different opinions is something that is taking a toll on the growth potential of the country. Just the fact that people in the country are forced to think twice about entering strategically important industries just because of unwanted attention is a big challenge to the growing economy.
Xi Jinping recently unveiled the latest five-year economic blueprint with the ambition of reducing the reliance of the country on US technology. The jittery entrepreneurship can raze these strong self-sufficiency campaigns. The policy of control by the Chinese authorities goes totally against those followed by the United States where the country has fueled technological growth by giving ample space of independence to the founders of its tech giants such as Bill Gates, Jeff Bezos and Elon Musk. The trade-off between innovation and regulation is what drives a country towards growth or devastation.
Before the Chinese government clamped down on the extravagant empire of Jack Ma, he was sort of like Steve Jobs, Bill Gates and Jeff Bezos put together in a Chinese economy. In 1999 Jack ma left his job as an English teacher to be the pioneer in taking the countries a step ahead when it came to technology by starting Alibaba. Nearly 15 years later the company made its debut on the New York stock exchange setting off of a gold rush among Chinese venture capitalists. Alibaba’s entry into the New York stock exchange was the then-largest initial public offering of the world. Seeing the massive success of Alibaba, Venture capitalist in China started to flood the potential Chinese startups with cash. According to market researcher Preqin, this motivation and inspiration by Alibaba’s listing had boosted the value of deals in the country from dollar 5.2 billion in 2013 to as much as dollar 56.4 billion by 2015. The investments turbocharged China’s economy making it one of the potential rivals to the United States in terms of tech leadership since the early days of Silicon Valley. The world’s second-largest economy still is the topmost rival of the United States. Well, that somehow explains the gigantism of the impact of the US-China trade war on the global economy. By the year 2018, the amount of venture money in China was tantamount to the same in the US. The country had an almost equal number of unicorn startups that did not go public as in the United States. China still holds some of the biggest names in the global tech industry such as Bytedance, Meituan, and Pinduoduo.
Jack Ma’s speech last October criticising China’s financial regulation has now become a cautionary tale. The Chinese government halted the initial public offering of the and group which was one of the most anticipated and huge events happening during the time. The offering was for as much as $35 billion. After pulling the plug on the IPO a few days before it was scheduled, Beijing launched an antitrust investigation into the company. Perhaps this was what made Jack Ma disappear for weeks before being spotted again in the month of January where he was in promoting rural education- a topic of utmost priority for China’s communist party. With all this going on, people have now started fearing any kind of celebration around the billionaire’s achievements.
Jack ma and his management team are crying all their ways to find a solution to this problem. They have concluded that Jack Ma is not an isolated case and have also stopped the salespeople from using the words such as “the biggest” or “the best” to avoid any sort of unwanted attention.