Jack Ma’s disappearance continues to stir frenzy across the globe as it’s close to three months since his last appearance in public. A flamboyant figure with a larger than life personality; Ma is one of china’s most prolific entrepreneur. His success with Alibaba made him China’s richest person but sometimes that’s not enough to stop the authorities from going after you.
Troubled started looming on Ma’s head after his opening remarks at the Bund Summit 2020. Ma released a torrent of words for China’s financial system that seemingly offended Vice President Wang Qishan. Ma described China’s financial system as operating with a “Pawnshop mentality” and described the regulatory bodies as managing it as “use the way to manage a railway station to manage an airport”.
The Bund Summit comprised of all the key players of China’s economy including the head of People’s Bank of China and many political figures as well. Ma’s blasting remarks caught the attention of President Xi; himself as Ant Group’s IPO offering has been called off
For the first time in history the biggest IPO offering; starting at $37 billion; for the Ant Group was being offered in Shanghai. For the first time an offering of this scale was not being done at the New York stock market. However, before this could take place the deal fell through and Ma hasn’t been seen in public since then.
Moreover, reports show that after Ma’s scathing remarks, executives of Alibaba and Ant Group got a call for questions by the authorities. Since then, Ant Group has also been ordered to restructure entire segments of the company to be more compliant with the socialist ideology. Alibaba has also been targeted with an investigation on the subject of Antitrust.
Talking to CNN Business Rana Mitter; an Oxford professor of of history and politics of modern China, said. “I think there’s one overall message that the party is really sending, and that is that tech entrepreneurs may be the most glamorous, the most publicly favorable face that China is showing to the world but there is no one individual, no one company bigger than the Chinese Communist Party.”
This has also led to many people noticing that the most probable cause of Ma’s disappearance is that he is lying low. It seems as if Ma finally understood that he crossed the red line that he shouldn’t have toed to begin with.
Doling out punishments or disappearances of high profile people isn’t uncommon in China. Beijing has been known to “rectify” those that clash with the interests of the party.
Chinese authorities had a certain liking to Ma’s abash personality as he represented a glamorous version of it to the world. Since the world; in its own right even today is wary of China and communism. Thus the government of China encouraged its private sector to grow and provided encouragement to the home grown tech giants like; Alibaba, Tencent, and Baidu. These tech companies have enabled china to knock their American rivals out of the competition. These companies also proved to be an absolute necessity for the country’s entertainment, interaction and commerce. However, Beijing soon began to view their ever increasing influence a threat to the country’s political and economical climate.
Ant Group; for instance collects lending fees free from the haggle of regulations in place at commercial banks.
This is part of a wider process being led by China to take back control of China’s tech innovation as the party wants and desires.
Since Ma’s comments at the summit the government of China has started introducing more policies to rein the tech industry. Tech crackdown has been initiated in an effort to demonopolize online platforms and their “disorderly expansion”.
This has resulted in ever increasing scrutiny for Alibaba and Ant Group along with the ongoing investigation against them. Since Ma’s disappearance and the investigation, Alibaba’s share have fallen by 30%. This has also put in a big dent on Mr. Ma’s personal net worth, tanking down from $62 billion to $49 billion. Rumors have also started spiraling that China and the party are looking to nationalize Alipay, Alibaba and the Ant Group. This could be a landmark decision for the private sector in China and possibly halter its growth in the global market.
One of the reasons why Ma became an international icon is because he as unapologetically himself and extremely vocal. However, since October all of his social media has been silent. He also missed the grand finale of his own show; Africa’s Business Heroes, that he himself created. Alibaba said that it was due to a scheduling conflict but most believe otherwise.
China has had a record of fining and even jailing executives who tend to be critical of the government. Which is why most people believe that Ma is lying low and voluntarily out of the spotlight. Critics are of the opinion that the Chinese government wants the Ant Group IPO story to dominate public conversation. Which is the company itself has gone quite as the consensus seems to be that the quieter the better.
Most people now believe that Ma will soon emerge out of the shadows with a scripted statement pledging allegiance to the government. Such as the likes Fan Bingbing and many more. “He got the signal that ‘I spoke too much, that caused me trouble so I need to shut myself up,” said Angela Zhang, an associate professor at the University of Hong Kong who has studied Chinese antitrust enforcement.
As Jack Ma’s disappearance continues to make the headlines, the future of his companies seems bleak at the moment. Globally, Jack Ma struck a chord with many of his followers and nation leaders. His lunches with Justin Trudeau and Obama generated the kind of buzz that was almost akin to the kind of soft power that China craves for. Jack Ma’s disappearance can make investors pull out on investments. This can also give the western economy the chance to impose sanctions upon Chinese companies.
Moreover, if the outcome of the investigation into Alibaba proves to be true then Alibaba might face fines upwards of 10% of the entire companies annual turnover. This could spell trouble for the corporation as it has already seen a drop in its shares in the market.
Chances are that Alibaba and Ant Group won’t be broken up but they will be faced with anti-monopoly laws. The government of China is looking to break the exclusivity held by Alibaba in the e-commerce market. It won’t be long before Ma is back in the public eye but not as the Ma we know. Most probably a subdued version of himself that doesn’t disagree with the policies set in place by the government.