THE CANADIAN MAN OF ACTION BEHIND ALIBABA’S JACK MA.
Who is Joe Tsai?
In 1999, Joseph Tsai was a private equity investor with Investor AB, the investment arm of the Wallenberg family, Sweden’s dynastic business empire. Tsai — who was born in Taiwan, lives in Hong Kong and holds Canadian citizenship — travelled to Hangzhou, in eastern China, to examine Alibaba, a startup launched by an entrepreneur named Jack Ma. Though Investor AB decided not to invest, Tsai jumped fully into Ma’s company. “Ma, who worked out of his apartment with about 20 young associates, was surprised,” the New York Times noted in 2019. “Tsai was making around $700,000 a year, and Ma said he could afford to pay him only about $7,000.”
Tsai went on to become the man behind Ma, bringing in investors including Goldman Sachs and Softbank and helping to transform Alibaba Group into an e-commerce juggernaut, described as a blend of Amazon, ebay, Google and other major tech companies. He helped orchestrate Alibaba’s initial public offering in New York in 2014, in which it raised US$25 billion, making it the largest-ever IPO.
Thus Tsai’s leap from private equity firm to Alibaba startup was a billion-dollar decision. As of April, the 57-year old had a net worth of US$11.6 billion, according to Forbes, putting him in the 189th spot on Forbes’s global list of billionaires. That figure has since dropped, with Forbes calculating Tsai’s net worth to be US$9.9 billion as of Aug. 31, likely due to the recent drop of Alibaba stock.
(Through a spokesperson, Tsai declined to be interviewed for this story. After three requests for clarification about Tsai’s Canadian connections — including how and when he became a citizen — the spokesperson said Tsai became a Canadian citizen in the 1970s when his parents were “naturalized.” It’s unclear if Tsai has ever lived in Canada.)
Tsai was Alibaba’s chief financial officer until 2013 and now serves as executive vice chairman.
He’s also the second-largest individual shareholder after Ma.
“In China’s tech industry, Ma is considered the creative force, and Tsai the one who turned ideas into action,” the Times noted. “Those who know Tsai describe him as smart and low key, someone who intentionally stayed in the shadow of the eloquent and high-profile Ma.”
Recently, though, there’s been a stark reversal of those positions, with Tsai gaining prominence — particularly in the U.S. — and Ma retreating to the business shadows, whether by choice or by government directive.
In 2019, Tsai became the full owner of the NBA’S Brooklyn Nets, buying the team from Russian billionaire Mikhail Prokhorov at a reported value of roughly US$2.35 billion, a league record. (He also bought the WNBA’S New York Liberty). That position means Tsai straddles U.s.-china business interests during a time of tension between the two countries, including over Canada’s detention of Meng Wanzhou, Huawei Technologies Co.’s chief financial officer, who awaits a judge’s ruling in her fight against extradition to the U.S. on a fraud charge. As Tsai told reporters at one point: “I’m steeped in this discussion and find myself having to explain China to Americans a lot.”
In June, for example, Tsai appeared on CNBC, where Andrew Ross Sorkin asked him about human rights abuses in China. Tsai said Sorkin needed to be specific because 80-90 per cent of the Chinese people “are very, very happy”; their lives are improving with an expanding economy, better jobs, and more access to education.
“If you talk to a parent in China and you ask them, ‘Are your children going to have a better life than you are?’
Most of them will say, ‘Absolutely, yes.’”
As for the firm control of China’s ruling Communist Party, Tsai said that whether “you like it or not”, China has been able to make huge leaps in infrastructure because of central control. “Different countries have different values and mores. In China you have a different set of values,” he said. “You have to look at the results. Are people happy? … The average citizen is very hopeful for the future. They are happy about where they are.”
Back in October 2019, Tsai, who was previously not known for his political stances, stepped into the heated discussion about Hong Kong’s antigovernment protesters. After an NBA league executive Tweeted support for the protesters — “Fight for freedom, stand with Hong Kong” — Tsai responded by referring to pro-democracy protesters as a “separatist movement,” which The Times called “an echo of language from Beijing.” Tsai told Sorkin that he felt physically threatened by protesters in 2019, and that the situation in Hong Kong should be viewed through the context of China not wanting its territories carved up by foreign powers, pointing to the long British presence in Hong Kong.
More recently, Tsai has been asked about the fate of Ma, his Alibaba co-founder. Ma is also the founder of Ant Group, China’s biggest fintech conglomerate. In a speech last fall, as Ant was preparing to go public, Ma criticized the country’s financial regulators, saying they are run more like a pawnshop than a modern financial institution. Ant’s IPO was halted and Ma, a very public figure, has largely disappeared from public view. (Ma had already stepped down as Alibaba’s executive chairman in 2019).
According to Tsai, Ma is perfectly fine, enjoying life away from business, focused on philanthropy and hobbies. He told Sorkin he talks to Ma daily and added, with a look of surprise, that
Ma has taken up painting. “It’s actually very good,” he said, offering to show some photos of Ma’s work. Tsai said Ma is “lying low willingly” — not at the directive of the government. “He’s actually doing very, very well,” Tsai added. “He’s living a normal life.”
Bruce Dickson, who has written extensively on the relationship between China’s Communist Party and the country’s private-sector entrepreneurs, says the Ma situation reveals that no business person, no matter how successful or wealthy or revered, can publicly speak out against the Party.
In an interview, Dickson chuckled when presented with Tsai’s claim that Ma had taken up painting.
“The private sector is still the largest sector of the economy. But now the Party is trying to regain some of the control over private firms, which is in line with this overall strategy of trying to control everything — greater control over the media, over universities, over NGOS, over churches and religious groups,” said Dickson, a professor of political science and international affairs at George Washington University, in Washington, D.C. “A lot of wealth is now being quietly shifted out of China to protect it in case the Party decides to really clamp down on things.”
According to the Times, Tsai is the son of a lawyer and came to the U.S. when he was 13 to attend a private boarding school in New Jersey. He later attended Yale University, earning both an undergraduate degree in economics and East Asian studies, and a law degree. (At Yale, Tsai played lacrosse and, reportedly, pickup basketball with future Supreme Court justice Brett Kavanaugh).
Married with three children, Tsai is now a member of the American business elite but worries about rising anti-asian-american sentiment and hate crimes, especially during the pandemic. That worry led him to help found the Asian American Foundation, which is reportedly funded with US$250 million from donors, including Tsai, Yahoo’s Jerry Yang, Walmart, the Ford Foundation and Bank of America. The goal is to fight anti-asian sentiment.
“Everybody’s OK with Asian Americans as long as things are going well,” he told Sorkin, listing examples of anti-asian measures in American history, “but if there’s a crisis, if there’s a pandemic, or if there’s a war or there’s an economic downturn, Asian Americans get scapegoated.”
THE AVERAGE CITIZEN IS VERY HOPEFUL FOR THE FUTURE.