National Post (National Edition)
Ma's vanishing act switches the spotlight on to China
HIGH-PROFILE ALIBABA FOUNDER HAS NOT BEEN SEEN SINCE CRITICIZING OFFICIALS IN OCTOBER
Jack Ma has never been one to shy away from the limelight. From starring in a kung fu film to appearing as Michael Jackson in a dance routine, the Chinese tycoon has delighted in his high public profile, surprising crowds with an apparently endless run of flamboyant displays and PR stunts.
Much of his US$50.9-billion fortune has been amassed from making huge bets on e-commerce. Ma founded Alibaba Group in 1999, when China had few Internet users. Online payments service Alipay launched five years later, before regulators said such businesses would be allowed. Both long shots grew to dominate their industries.
But Ma's latest gambit has backfired. In October, he called Chinese regulators too conservative and urged them to be more innovative. In November, they halted the US$35-billion stock market debut of Ant Group, an online finance platform that grew out of Alipay.
Lately, however, Ma has been remarkably quiet. The tech billionaire was scheduled to appear in Business Heroes, an Apprentice-style TV contest. Despite filming several early episodes, he never turned up for the grand finale in November. A publicity manager claimed Ma simply had scheduling conflicts.
“Beijing has `disappeared' Jack Ma, which means any number of extra judicial processes to detain him,” says Dan Blumenthal, director of Asian Studies at the American Enterprise Institute and author of The China Nightmare: The Grand Ambitions of a Decaying State.
“This is a message to all entrepreneurs and businessmen not to become too successful or famous.”
CNBC on Tuesday reported that Ma is not missing but simply laying low for the time being.
International investors have privately breathed a sigh of relief, believing Ma's silence is a tactical move to avoid further antagonizing Chinese authorities.
They have likened his current low profile to a period that followed Alibaba's float in 2014. Ma was eventually forced to issue a public apology for insulting a rival. The concern now is that the wave of international investment into China could slow to a trickle if Ma's silence is seen as a public sign that the country is no longer open for business.
“Doing business in China is akin to doing business in a neighbourhood controlled by the Mafia,” says Grant Newsham, a senior fellow at the Centre for Security Policy, who has for years predicted Ma's downfall.
“Things might go well for a while, even a long while, but then one day the mob decides it's over,” Newsham adds. “Only Western financiers and the CEO class don't seem to understand this.”
Ma's disappearance is not the first time that Chinese businessmen have vanished after criticizing Xi Jinping and his policies. “It will take down anyone who it sees as a threat, broadly defined,” Blumenthal says.
Ren Zhiqiang, a property tycoon, disappeared in March last year after criticizing the government's handling of the Covid-19 virus. He was later sentenced to 18 years in prison for alleged corruption, bribery and embezzlement of public funds.
On Tuesday, the former chairman of China's Huarong Asset Management was sentenced to death following a long-running bribery case. Lai Xiaomin, also a former banking regulator, had pleaded guilty to accepting bribes.
Many investors have for years privately cautioned executives against expanding to China or taking investment from the country, fearing the deals could lead to sanctions or theft of intellectual property. “China is clearly playing more of a role in (companies') direct operations, almost as if the Chinese Communist Party is now a board member of these companies,” says Abishur Prakash, head of the Centre for Innovating the Future.
There are also growing signs of increasing Western retaliation against Chinese technology companies, a continuation of a trade war that has further reduced investor appetites in Chinese businesses.
The plans to remove three Chinese telecommunication companies from the New York Stock Exchange at the behest of Donald Trump may have rung alarm bells, but the order, an apparent lashing out at Beijing during the U.S.'s ongoing trade war with the nation, was scrapped late on Monday evening.
This specific retaliation may have been withheld, at least for now, but the surprisingly low profile of Ma has led to a flurry of social media speculation outside of China. An old video of exiled billionaire Miles Kwok warning that Ma will end up in jail “or dead” as the government goes after Ant Financial is now gaining traction on Twitter.
At a politburo conference in late December, where leaders of the Chinese Communist Party convene to discuss important topics for the year ahead, analysts said it was imperative that the government tackled any “disorderly” flow of capital.
But authorities may decide not to trample too hard on rising stars. “The challenge that China's government may face is that by taking aim at these large homegrown technology companies, they could also be almost suffocating innovation, Prakash says.
“It's a message to the market that if you get too big, we're gonna come after you. And that's never an incentive for an entrepreneur with big ambitions.”