Why China turned against Jack Ma

In China, Jack Ma is synonymous with success. An English teacher turned into an internet entrepreneur is the richest person in the country. He founded Alibaba, the closest thing Amazon has to its peers and rivals. After Donald Trump was elected U.S. president in 2016, Ma was the first Chinese person he met.

He translated that success into the life of a rock star for “Daddy Ma,” as some people online called him. He played an unconquerable kung fu master in a 2017 short film full of top Chinese movie stars. He sang with Faye Wong, a Chinese pop diva. The painting he created with Zeng Fanzhi, China’s best artist, sold at Sotheby’s auction for $ 5.4 million. For young and ambitious China, Daddy Ma’s story was one to emulate.

But lately, public sentiment has worsened, and Daddy Ma has become a man people in China like to hate. He has been called a “villain,” an “evil capitalist,” and a “blood-sucking spirit.” The writer quoted Mainih as “10 deadly sins.” Instead of dad, some people started calling him “son” or “grandson”. In stories about him, a growing number of people leave comments quoting Marx: “World workers, unite!”

This loss of stature occurred when Ma faced growing problems with the Chinese government. Chinese officials said on Thursday that they had opened an antitrust investigation against Alibaba, an e-commerce company, of which he is a co-founder and over which he still has a lot of power.

At the same time, government officials continue to circle Ant Group, a fintech giant that Ma singled out from Alibaba.

Last month, authorities canceled Ant’s planned emergency first public offering, less than two weeks after Ma fined financial regulators for obsessing over minimizing risk and accused Chinese banks of acting like “pawnshops” by giving loans only to those who could give collateral. On Thursday morning, when the anti-trust investigation of Alibaba was announced, four regulatory agencies said officials would meet with Ante to discuss new oversight measures.

On the surface, the change in Maine’s public image stems in large part from the Chinese government’s growing criticism of his business empire. A look below the surface shows a deeper and more worrying trend for both the Chinese government and the entrepreneurs who have pushed the country out of its economic dark age over the past four decades.

An increasing number of people in China seem to feel that the opportunities enjoyed by people like Ma are disappearing, even in the midst of China’s rise in post-coronavirus. Although China has more billionaires than the United States and India combined, about 600 million of its people earn $ 150 a month or less. Although consumption in the first 11 months of this year fell by about 5% nationally, Chinese luxury consumption is expected to increase by almost 50% this year compared to 2019.

Young graduates, even those with a degree from the United States, face limited job prospects and low salaries. Housing in the best cities has become too expensive for first-time buyers. Young people who have borrowed from a new generation of online lenders, such as Ma’s Ant Group, have debts they increasingly resent.

With all of China’s economic success, the long-standing resentment of the rich, sometimes referred to as the hatred complex of the rich, has long erupted beneath the surface. With Mao, it took revenge.

“A remarkable popular billionaire like Jack Ma will definitely be hanged at the top of the pillar,” an Internet commentator wrote in a widely circulated post on social media, referring to the famous lynching slogan in the French Revolution, “À la lanterne!” The article was liked 122,000 times on the Weibo Twitter platform and read more than 100,000 times in the messaging app and social networks WeChat.

The Communist Party seems more than willing to take advantage of that resentment. This could mean impending problems for entrepreneurs and private companies under the leadership of Xi Jinping, China’s top leader, who values ​​servility and loyalty above all else.

At last week’s annual leadership meeting, which set the tone for the country’s economic policy for next year, the party vowed to strengthen antitrust measures and prevent “disorderly capital expansion”.

Some businessmen say that hostility towards Ante and Ma makes them wonder about the fundamental direction of the country.

“You can have absolute control or you can have a dynamic, innovative economy,” said Fred Hu, founder of Hong Kong-based investment firm Primavera Capital Group. “But it’s doubtful you can have both.”

His firm is an investor in the Ant Group, and he sits on the Ant board.

Xi made no secret of what his ideal capitalist should be. Ten days after the debacle at Ant’s IP, he toured a museum exhibit dedicated to Zhang Jian, an industrialist who operated more than a century ago. Zhang helped build his hometown of Nantong and opened hundreds of schools. A business figure in the Xi era, the message read, should also put his country ahead of business.

At a July meeting with members of the business community, Xi pointed to Zhang as a role model and urged them to rank patriotism as their top quality. (Xi reportedly did not mention that Zhang died in bankruptcy.)

Ma has her own philanthropic projects such as several initiatives in rural education and an award to help develop entrepreneurial talent in Africa. But in many other respects, a lavish tech entrepreneur is vastly different from Zhang.

It has long enjoyed a better reputation than its peers in manufacturing, real estate, and other industries whose advantage may stem from nurturing close government ties, ignoring environmental rules, or exploiting employees.

He is known for making bold statements and challenging authority. In 2003, he created Alipay, which later became part of the Ant Group, placing the square of his business empire at the center of the state-controlled world of finance.

“If anyone needs to go to jail for Alipay, let it be me,” he told his colleagues at the time.

Sometimes he subtly dared the government to punish his defiance. Regarding Ant’s job, he repeatedly said, “If the government needs it, I can give it to the government.”

And his top lieutenants repeated the line.

At the time, few people took these remarks seriously. People who know him well considered them very “things with Jack”.

“Giving Alipay to the country? Jack Ma is just talking, ”he read the title of a 2010 article in China Business News.

Now the chances are high that these bold statements will become real.

“Given what happened, Ant will eventually have to be under the control or even majority owned by the state,” said Zhiwu Chen, an economist at the University of Hong Kong Business School.

The pressure on Ma signals a change in the way the Chinese government regulates the internet. He censored the content for a long time, but adopted a laissez-faire approach in other ways. Regulations were reserve. State-owned companies were not involved. And in the beginning, the Chinese internet industry was small.

Today, Alibaba and its archive, Tencent, control more personal data and are more closely involved in everyday life in China than Google, Facebook, and other technology titans in the United States. And just like their American counterparts, Chinese giants sometimes harass smaller competitors and kill innovation. You don’t have to be a member of the Communist Party to see the reasons to curb them.

Instead of disrupting the state system, he liked companies. Sometimes they even help the authorities find people. Yet the government increasingly sees their size and influence as a threat.

However, Chinese technology companies are not the largest monopoly in the country. They are owned by a state that dominates banking and finance, telecommunications, electricity and other key businesses.

“China Mobile is a monopoly. “China’s industrial and commercial bank is a monopoly,” wrote Zhang Weiying, a prominent economist at Peking University in 2017, “because you can’t enter these industries without government permission.”

The article was published on several social media accounts last week, but was quickly censored.

It is too early to say how far regulators will go in retaining Ma and big technology. But some pro-market people in China worry that the country is moving toward the hard line of the 1950s, when the party eliminated the capital class, using language that likened capitalist leanings to impurities, flaws and weaknesses.

To these people, part of the language recently used by Eric Jing, Ant’s chair, evoked an era. At a conference on Dec. 15, he said the company “looked in the mirror, revealing our shortcomings and conducting a physical examination.”