[Little more than a decade on, Ma is experiencing a much less triumphant moment in the spotlight. After nearly three months in which his whereabouts have been unknown, following a public show of dissent towards Beijing, he resurfaced last week, apparently much chastened.]
By Rob Davies and Helen Davidson
Jack Ma, chief executive of
e-commerce giant Alibaba,
had earned the right to make a spectacle of himself. On that day in September
2009, in front of 16,000 adoring employees packed into Hangzhou’s Yellow Dragon
stadium, the eccentric but iron-willed former English teacher was celebrating.
He had built a bona fide tech champion, China’s answer to Amazon, eBay and
PayPal rolled into one.
Little more than a decade on, Ma is
experiencing a much less triumphant moment in the spotlight. After nearly three
months in which his whereabouts have been unknown, following a public show of
dissent towards Beijing, he resurfaced
last week, apparently much chastened.
His 48-second appearance – in a
broadcast from an unknown location – was “like a hostage video”, according to
one member of a large online forum of China analysts.
Alibaba remains a powerhouse of the
Chinese business scene, but Ma has
had his wings clipped, having taken the bold and perhaps foolish step of
crossing the Communist party, of which he is a member.
“I don’t understand what he was
thinking,” says Bill Bishop, who writes the China-focused newsletter Sinocism.
“That’s not constructive in the Chinese system.”
During a summit in Shanghai last
October, Ma criticised regulators’ attitude towards big business, accusing them
of a “pawnshop” mentality that stifled innovation. “We shouldn’t use the way to
manage a train station to regulate an airport,” Ma declared. “We cannot regulate
the future with yesterday’s means.”
He was speaking just moments after
Wang Qishan – righthand man to China’s leader, Xi Jinping – had said much the
opposite. Wang had stressed the primacy of safe regulation ensuring that
business did not become the master of the state.
“[Ma’s speech] was about
risk-taking, putting your neck on the line and not minding the instability that
comes from that,” says George Magnus, a research associate at Oxford
University’s China Centre and the author of Red Flags: Why Xi’s China
Is in Jeopardy. “That’s anathema to the philosophy of Xi Jinping’s
party.”
Ma’s direct contradiction of
Beijing’s rhetoric went viral on social media, adding to the potential
embarrassment for the Communist party. He might have been worth more than
£35bn, but it swiftly became clear who was boss.
Within a fortnight, the
entrepreneur and two of his lieutenants were summoned to meet financial
regulators. A day later, the imminent stock market flotation of Ant Group – an
online finance company spun out of Alibaba that includes the digital payments
system Alipay – was cancelled.
Regulators cited “changes to the
financial technology regulatory environment and other major issues”, but the
prevailing narrative was that Ma was being punished at the cost of Ant Group’s
initial public offering (IPO). Shares in Alibaba, which owns part of Ant, fell
more than 8%, whittling down Ma’s net worth by more than £2bn. Authorities in
Beijing also ordered an investigation into allegations
of “monopolistic practices” at Alibaba – as well as fellow tech firm
Tencent – and later ordered Ant Group to scale down its operations.
Bishop agrees that there are
genuine reasons for concern about the way Alibaba wields commercial power and
its treatment of workers. There is also, he believes, genuine anxiety among
regulators about the systemic risk inherent in Ant’s model of originating
numerous small loans. But the idea that Ma’s public show of dissent was not at
the root of the last-ditch intervention in the Ant Group float is, says Bishop,
“crazy”.
“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 purely regulatory
concern, why let it get to IPO? It’s pretty obvious that his speech that day
was somehow the trigger.”
Rumours abound that it was Xi
personally who pulled the plug. Magnus, who has charted Xi’s style of
government, emphasises his regime’s steady march away from its flirtation with
“marketisation”. Instead, Xi’s China has gravitated towards a Leninist
ideological approach, imposed via the “United Front” network of businesses and
groups whose interests must align with those of the party.
“Jack Ma happens to be one of the
most popular and well-known people who has fallen foul of the leadership’s new
angst about people growing too big for their boots and having powers that seem
to rival the authority of the party itself,” he says. “If entrepreneurs are
politically compliant, they will thrive. If they’re not compliant they will not
thrive and will be subject to the kind of treatment Jack Ma has just been
the victim of.”
During the three months that Ma was
missing, speculation was rife. Some said that the 56-year-old had fled the
country, others that he was just keeping a low profile and had been seen on the
golf course. The rumour mill accelerated when he was abruptly replaced as a
judge on the TV talent show Africa’s Business Heroes.
The very fact of Ma’s reappearance
sent Alibaba’s shares up 8.5% on the day the video of him was confirmed as
genuine, but his return has not necessarily cleared things up.
In the video, dated 10 January but
released last week, Ma devoted himself not to matters of regulation and
business but to uplifting China’s rural poor. “My colleagues and I have been
learning and thinking, and we have become more determined to devote ourselves
to education and public welfare,” he said, addressing teachers at a rural
school.
He had, he said, reached the
conclusion that Chinese entrepreneurs should be devoting their time to “rural
revitalisation and common prosperity” – both key parts of the Xi agenda.
Magnus points out that it is
impossible to know whether Ma is under some form of detention. His current
whereabouts are not certain either. And the fact that his businesses have
become so integral to everyday financial transactions for many Chinese people
may not protect him.
“Do they have to 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 don’t think they’d have any qualms about
shutting him away.”
Domestic and foreign investors have
been not just bruised by the failed flotation of Ant Group, but reminded of
what is expected of them. “Starting last summer, we began to hear a lot more
about what Xi’s vision is for private entrepreneurs and how they fit within the
objective of the great rejuvenation that he’s pushing,” says Bishop.
“Xi has brought up patriotic
entrepreneurs from the last 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 folks
see that as a shifting political wind that they have to be more sensitive to.”