Jack Ma, the most famous businessman ever in China, is avoiding the spotlight. Friends said he is painting and practicing Tai Chi. Sometimes, he shared drawings with Masayoshi Son, the billionaire head of Japan’s SoftBank Group.
Last week, at the virtual board meeting of the Russian Geographical Society, the wider world glimpsed Jack Ma for the first time. When President Vladimir Putin was discussing Arctic affairs and protecting leopards with others, Ma could be seen bowing his head and looking bored.
Jack Ma is an entrepreneur with extraordinary charm. He showed for the first time how China will shake the world in the internet age 20 years ago; his face is decorated with shelves of admiring business books; who has never met. He was unable to dazzle people after being in the crowd–it was an obvious change of pace.
Under the leadership of Xi Jinping, the top leader of the Chinese Communist Party, China has punished and humiliated a series of rich people. These wealthy people have accumulated enormous wealth and influence, but are regarded as transcending their boundaries. Jack Ma and his online empire’s crown jewels, e-retail giant Alibaba and fintech giant Ant Group, are Beijing’s biggest targets so far, as officials have begun to regulate China’s powerful Internet industry as never before.
For years, US and European officials have sought to control Internet giants. However, it is hard to imagine that Western regulators will bring about the same huge changes in fate as Jack Ma and Xi declared extensive control over China’s private sector and required a commitment to the party and a commitment to social stability above profit.
Xiao Jianhua, who was once the trusted financial deputy of many Chinese elites, was robbed from a Hong Kong luxury hotel in 2017. Oil tycoon, Ye Jianming, who sought to establish contacts in Washington, and Wu Xiaohui, whose insurance company bought Waldorf Astoria Hotel in Manhattan, were detained. Wu was later imprisoned. Lai Xiaomin, the former chairman of a financial company, was executed this year.
Richard McGregor, a senior researcher at the Lowy Institute and author of the Party: The Secret World of Chinese Communist Rulers, said: The general iron rule is that there is no center of power outside the party. Beijing’s repression of technology has swept the board of directors outside Alibaba.
Simon Hu, CEO of Ant Group, resigned in March. A few days later, Colin Huang resigned as chairman of Pinduoduo, a mobile market he founded and took public within a few years. On the same day, Pinduoduo announced its resignation, the company said it had attracted 788 million shoppers in the past 12 months, which is more than Alibaba.
At a political meeting that month, the founder of the social media giant Tencent, Pony Ma, proposed stricter regulations for internet companies or, as the official newspaper said, an innovative regulatory approach he has adopted.
Last week, the Chinese antitrust agency summoned thirty-four top internet companies to discuss new fair competition rules. Within a few hours, they were discussing business changes and publicly pledged to be consistent.
Gordon Orr, a non-executive director of Chinese food delivery giant Meituan, said: These new regulations will require internet platforms to consider their future innovations, and the result may be reduced innovation.
Even so, Alibaba and other internet giants still have a certain position in China to protect them from the harshest treatment. While praising Titan for strengthening economic supervision, officials also praised Titan’s economic contribution. Xi Jinping hopes that China’s economy will be driven more by its own innovations than by fickle foreign powers.
This means that it is too early to announce Jack Ma’s announcement.
McGregor said: Compared with other entrepreneurs, his company plays a vital role in the success and operation of China’s economy. The government hopes to continue to benefit from his company, but only on their terms. Yes, the government has not nationalized Alibaba. It has not confiscated its assets. It is just reducing its scope of operations in the field. Alibaba declined to comment.
Jack Ma is not a newbie in dealing with the Chinese authorities. Before founding Alibaba in 1999, he worked briefly and unfortunately in a government-run advertising company. At the time, China was still accustomed to the idea of powerful private entrepreneurs, and Jack Ma proved to be good at charming government officials.
Alibaba definitely has the opportunity to grow into a world-class company, said Wang Guoping, the secretary of the Hangzhou Municipal Party Committee in the eastern city where Alibaba was located at the time, in the 2000s. What a world-class company needs most is a soul, a commander, and a world-class businessman. I believe Jack Ma meets this standard, he added.
Early Alibaba executive Porter Erisman stated that Jack Ma realized the possibility of success in China early on.
Erisman said: There is only one person in the company that caught our attention “that’s Jack”. One day, we may face such a big problem that we have to bear the pressure because of having too much market power.
Erisman said Jack Ma expressed his concerns at a staff meeting in the mid-2000s. He added that at the time, most Alibaba employees were just thinking, how will we make money?
In 2011, Jack Ma learned how his ambitions touched shareholders and regulators in the wrong way. He quietly took over Alipay, Alibaba’s payment service, angering Yahoo, one of Alibaba’s largest investors. Ma said that according to China’s new regulations, this move is necessary. Alipay later became the Ant Group.
Alipay transfer made him feel timid, said Duncan Clark, who has known Jack Ma since 1999 and is currently the chairman of consulting firm BDA China. He kind of got away with it.
With the development of Alibaba, Jack Ma began to be welcomed by presidents and movie stars, but also by more Chinese entrepreneurs. Clark said that this echo chamber may have distorted Jack Ma’s notion about himself and his position in the government. Otherwise, he may see the writing on the wall, especially when Xi Jinping promotes closer cooperation between private companies and the government.
When Jack Ma stepped down as chairman of Alibaba in 2019, a comment in the official Communist Party newspaper declared: There is no so-called Ma era, only Jack Ma is part of this era. Chinese leaders need the private sector to help sustain economic growth. But they also don’t want entrepreneurs to undermine the party’s dominant position in society as a whole.
In October, just as Ant was preparing to go public, Jack Ma delivered a speech at a Shanghai meeting and criticized China’s financial regulators. For a long time, he has regarded ants as a tool for disrupting the country’s large state-owned banks. However, the opportunity to make this point of view is hardly that short. Soon after, officials stopped listing Ant’s stock.
A political scientist at the Hong Kong University of Science and Technology, Kellee Tsai, said that in China, it’s hard to say that the emperor has no clothes these days.
Jack Ma has also largely disappeared from within his company. A person who saw the news but was not authorized to speak publicly said that in January, he jumped into an internal chat group to answer a business question. Employees later shared Jack Ma’s information to appease nervous colleagues.
Recently, as per the Hurun Report, a Shanghai research group, estimated that for the first time in three years, Jack Ma has not become one of the three richest people in China. The new number one in the country is Zhong Shanshan, who is the low-key head of bottled water giants and pharmaceutical companies.
Last year when his water company went public, Zhong was so little known that Chinese news reports about his sudden wealth had to explain to readers how to pronounce an obscure Chinese character by his name.