The government of China told the country’s media to censor reports on an antitrust investigation in the technology group Alibaba, whose founder Jack Ma disappeared from public view as misfortunes escalated for his business empire, according to people familiar with the matter.
The move by authorities to exercise control over media coverage of the woes of the prominent group shows that the issue has become a matter of national political sensitivity in China.
Beijing has suppressed Ma’s business empire in recent months. The initial $ 37 billion public offering by Alibaba’s payments affiliate, Ant Group, was canceled by the authorities at the last minute in November, while the following month, competition regulators announced an Alibaba antimonopoly investigation.
In his last public appearance in October, Ma, one of the country’s wealthiest people, delivered a speech criticizing China’s state-owned banks and financial regulators.
In late December, the Chinese government’s propaganda arm instructed the media to “strictly invoke” the official line in the antitrust investigation of Alibaba and “not to make changes or engage in extensive analysis without permission.”
“If any company announcement is opposed to the official position, do not publish, do not pass on, do not quote foreign media,” said the directive, according to two people who read it.
The government spokesman, the People’s Daily, criticized China’s technology industry for seeking “an ever-increasing concentration of the market”, saying that increased market surveillance is important for the healthy development of the economy.
“This directive is severe and unusual,” said Xiao Qiang, a research scientist at the University of California at the Berkeley School of Information. “The language [of the directive] it is very similar to the ‘very important political events’ reporting guidelines, such as the Bo Xilai trial, ”he added, referring to the disgraced former politician sentenced to life in prison for corruption.
“Ma companies’ investments are directly associated with some of China’s most powerful political families. The fact that this time he is having problems with the Chinese state probably has high politics in the background, not just because he delivered a speech that may have reached Xi [Jinping, China’s president] or the courage of some other party official, ”said Mr. Xiao.
Mr. Xi was involved in the decision to suspend Ant’s IPO, according to people close to the events. Alibaba’s shares have fallen about 30% in the weeks since.
“I think Beijing is still afraid of Alibaba to some extent. . . The government thinks it is being challenged, ”said a state media official.
Unofficial media in China, such as online blogs, continue to speculate about Ma’s whereabouts, although several have been censored.
His empire has been under the scrutiny of several government departments since Ant’s IPO, which would have been the largest in the world, was destroyed by regulators.
In addition to the antitrust investigation into Alibaba, China’s central bank plans to directly split and regulate the Ant consumer credit unit and other parts of its fintech empire, according to people informed of the discussions.
The crackdown on Ma has raised concerns among investors and businesspeople that policy measures go beyond regulation and are more about politics and show the tech billionaire who is the final boss.
In November, the vice president of the state propaganda arm told a Chinese media conference to “resolutely prevent the risk of capital controlling public opinion”.
Last month, the Huxiu media platform, supported by Alibaba, was forced to stop its operations for a month after publishing an editorial that warned against excessive punishment from China’s technology groups.
The editorial argued that US business monopolies helped the country achieve global market dominance, while China’s technology companies were not large enough to warrant antitrust polls.
“When it comes to Chinese companies facing the world, not only can Huawei be trusted, but also Tencent, Alibaba, ByteDance, Baidu, Xiaomi, BYD,” he concluded, referring to some of China’s leading technology companies.