Wwearing burgundy lipstick and a long, oxygenated wig, the small businessman who would soon become the richest man in China took the stage and shouted Can You Feel the Love Tonight? Disney The Lion King.
Jack Ma, chief executive of e-commerce giant Alibaba, won the right to make a show of himself. On that September 2009 day, in front of 16,000 dedicated employees stationed at Hangzhou’s Yellow Dragon stadium, the eccentric but obstinate former English teacher was celebrating. He built a true technology champion, China’s response to Amazon, eBay and PayPal in one.
A little more than a decade later, Ma lives a much less triumphant moment in the spotlight. After almost three months in which his whereabouts were unknown, after a public demonstration of dissent over Beijing, he reappeared last week, apparently greatly scolded.
His 48-second appearance – in a broadcast from an unknown location – was “like a hostage video,” according to a member of a large online forum for analysts in China.
Alibaba remains a driving force in the Chinese business scene, but Ma has had his wings clipped, having taken the bold and perhaps foolish attitude of crossing the Communist Party, of which he is a member.
“I don’t understand what he was thinking,” said Bill Bishop, who writes the Sinocism newsletter, focusing on China. “This is not constructive in the Chinese system.”
During a summit in Shanghai last October, Ma criticized the regulators’ attitude towards large companies, accusing them of a “pawnshop” mentality that stifled innovation. “We must not use the way of running a train station to regulate an airport,” said Ma. “We cannot regulate the future with yesterday’s means.”
He spoke just moments after Wang Qishan – the right hand of China’s leader, Xi Jinping – said otherwise. Wang emphasized the primacy of safe regulation, ensuring that businesses do not become owners of the state.
“[Ma’s speech] it was about taking risks, putting your neck at risk and not caring about the instability that comes from it, ”says George Magnus, associate researcher at the China Center at Oxford University and author of Red flags: why Xi China is in danger. “This is anathema to Xi Jinping’s party philosophy.”
Ma’s direct contradiction to Beijing’s rhetoric went viral on social media, adding to the potential embarrassment for the Communist Party. It could be worth more than £ 35 billion, but it quickly became clear who the boss was.
Within two weeks, the businessman and two of his lieutenants were summoned to a meeting with financial regulators. A day later, the impending stock market fluctuation of Ant Group – an online finance company derived from Alibaba that includes the Alipay digital payment system – was canceled.
Regulators cited “changes in the regulatory environment for financial technology and other important issues”, but the prevailing narrative was that Ma was being punished at the expense of Ant Group’s initial public offering (IPO). The shares of Alibaba, which owns part of Ant, fell more than 8%, reducing Ma’s equity by more than £ 2 billion. The authorities in Beijing also ordered an investigation into the allegations of “monopolistic practices” at Alibaba – as well as at the technology company Tencent – and later ordered the Ant Group to reduce its operations.
Bishop agrees that there are genuine reasons for concern about how Alibaba exercises commercial power and how it treats workers. He also believes that there is genuine anxiety among regulators about the systemic risk inherent in Ant’s model of originating several small loans. But the idea that Ma’s public demonstration of dissent was not at the root of the last-minute intervention on Grupo Formiga’s float is, says Bishop, “crazy”.
“It is China, it is the communist party – it is always political. He basically embarrassed the vice president and regulators … four days later, his IPO is canceled.
“If it was a purely regulatory concern, why let it get to the IPO? It is quite obvious that his speech that day was somehow the trigger. “
Rumors abound that it was Xi personally who pulled the plug. Magnus, who traced Xi’s style of government, emphasizes the steady march of his regime away from the flirtation with “commodification”. Instead, Xi’s China gravitated to a Leninist ideological approach, imposed through the “United Front” network of companies and groups whose interests must align with those of the party.
“It turns out that Jack Ma is one of the most popular and well-known people who fell out of favor with the leadership’s new distress about people getting too big and having powers that seem to rival the authority of the party itself,” he says. “If entrepreneurs are politically compatible, they will prosper. If they are not obedient, they will not thrive and will be subjected to the kind of treatment that Jack Ma just fell victim to. “
During the three months that Ma was absent, speculation increased. Some said that the 56-year-old man had fled the country, others that he was just keeping a low profile and was seen on a golf course. The rumor accelerated when he was abruptly replaced as a judge on the TV talent show African business heroes.
The mere fact of Ma’s reappearance caused Alibaba’s shares to rise 8.5% on the day his video was confirmed to be genuine, but his return did not necessarily clarify things.
In the video, dated Jan. 10 but released last week, Ma has devoted himself not to regulation and business issues, but to raising China’s rural poor. “My colleagues and I have been learning and thinking, and we have become more determined to dedicate ourselves to education and public welfare,” he said, addressing teachers at a rural school.
He had, he said, come to the conclusion that Chinese businessmen should devote their time to “rural revitalization and common prosperity” – both essential parts of Agenda Xi.
Magnus points out that it is impossible to know if Ma is under any form of detention. His current whereabouts are also not certain. And the fact that his business has become so essential to the daily financial transactions of many Chinese may not protect him.
“Do they have to be careful with him? Some may think so, because their high position is a little bit like Bill Gates or someone like that. To be honest with you, if the party was really looking forward to him and his influence, I don’t think they would have any qualms about sending you away. “
Domestic and foreign investors were not only hurt by the failed Ant Group fluctuation, but also remembered what is expected of them. “Last summer, we started hearing a lot more about what Xi’s vision is for private entrepreneurs and how they fit into the major rejuvenation goal he is promoting,” said Bishop.
“Xi created 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. Politically savvy business people see this as a shift in the political wind to which they must be more sensitive. “