Jack Ma is currently worth nearly half of what he was a mere nine months ago. What child did he bear that led to this downfall and fallout with the Chinese government, the CCP. The story is longer and has much more than one or two saucy comments.
Inception
When Jack Ma founded the Alibaba company, he had to deal with the stringent regulators with their all-seeing all-watching eyes. Alibaba was rising alongside another tech giant named Tencent. Both the companies grew in China and suffused into other products of gaming, messaging, e-commerce, etc. Tencent holds a complete monopoly in China, when we think of US giants they still are many but Tencent is one company with a replica of Facebook, Whatsapp, Spotify, YouTube, Paypal, etc. Similarly Alibaba has its hands in many other industries as well. The two companies have maintained a stable duopoly in the market and haven’t fallen victim to the Prisoner’s dilemma.
Shining too bright
Alibaba has been shining too bright in the eyes of the CCP. This led to the Communist Party feeling shadowed by the company. The Chinese government cancelled his other company, Ant Group’s IPO and carried out anti-trust litigations against Alibaba resulting in fines of over $2.8 billion. The Ant Group was predicted to be the biggest IPO of all time, eve bigger than Saudi Aramco, also the third largest IPO ever had been that of Alibaba. The Chinese government is going as far as breaking down the Ant Group company and gathering the data which the company possessed.
Going after everything
After Alibaba and the Ant Group, the Chinese regulators went for the popular UC Browser which is also a company under Alibaba. The browser was completely removed from most of the app stores. After Google Chrome, this had been the second most popular browser in the world. Jack Ma had founded a university called ‘Hupan’ in 2015. This wasn’t left either, it was closed down despite of becoming China’s most prestigious business elite school.
A company named Huarong Asset Management had handled much of finance in China. This company was known for its widespread corruption and anti-market practices. The Chinese regulators didn’t just arrest the CEO Lai Xiaomin but went as far to execute him. The man was killed on 29th January 2021.
Criticism of regulators
Jack Ma in October 2020 said, “Great innovation is not afraid of regulations” and said that state banks operate like a pawn shop. This was enough scarring as many of the government officials were also in the meeting. As the Ant Group was also operating in a way where the state banks were taking up all the risks, the regulators rightfully pushed them to own a certain percentage of their lending called ‘micro lending’ for small businesses. This doesn’t mean that Jack Ma personally had taken zero risks, he was walking on a tightrope handling all these companies and their sub-companies.
He disappeared from the public eye for a long time and wasn’t even found at his residence. The face of entrepreneurship and opportunities in China now vanished into the darkness. He had been the man leading the front on communicating with Chinese regulators over letting businesses prosper in the country. Jack Ma appeared back in January 2021 and talked about philanthropy in a tone which was modest, much in contrast to his usual energetic and brash nature. It is unlikely that China will do something to seriously sabotage these giants as they are a strong pillar in Chinese economy, what China can do is target individuals like Jack Ma. Again it is unlikely that Jack Ma will undergo the same process of what happened to Lai Xiaomin, executing the face of opportunities in China would be too big a statement to make.
Many billionaires in China have started the practice of maintaining a low profile. It’s a tragedy that Jack Ma will have to concur to the same. As the saying goes: bend the knee or get broken.
Credits: Bloomberg, Forbes
