Internet companies are the major growth engine of the Chinese economy. But they will fall under the Beijing government’s sights when their influence goes beyond the limit.
According to the New York Times billionaire Jack Ma – China’s most famous businessman – is away from the limelight. Close people revealed that he spent his time painting and practicing tai chi. The Chinese government is bringing a series of technology corporations into sight. The enormous wealth and influence of these businesses are said to be beyond the limit. Jack Ma, Alibaba e-commerce conglomerate and fintech (finance and technology) company Ant Group are Beijing’s biggest targets. European and American authorities have been trying to tighten control of the tech giants for years. However, they cannot make a big difference like what happened to the Alibaba founder in China. The Chinese government insists that businesses must commit to placing social stability above profits. Tencent founder Pony Ma (left) and billionaire Jack Ma at an event in Beijing in 2018. Photo: New York Times. The unprecedented “punishment” campaign The Beijing government is not just tightening the control of Alibaba. Ant Group CEO Simon Hu resigned in March. Just a few days later, Pinduoduo founder Colin Huang stepped down as chairman. Also in March, at a meeting, Tencent founder Pony Ma proposed stricter rules for Internet businesses, including Tencent. He also has a “voluntary meeting” with the country’s antitrust agencies. Last week, China’s antitrust agency summoned top 34 Internet companies to discuss new rules of fair competition. The discussion revolves around changes in business. Companies are committed to taking it seriously. “The new rules will require Internet platforms to look back on how they innovate in the future. And as a result there will be less innovation,” said Gordon Orr, a board member of Meituan, company. Chinese food delivery, comment. However, New York Times The Beijing government will not be too heavy on Alibaba and other Chinese Internet corporations. Even as tightening oversight, Beijing still praised the group’s contributions to the economy. Pinduoduo founder Colin Huang stepped down from his chair as the company’s chairman. Photo: New York Times. Chinese President Xi Jinping wants the economy to be driven by innovation from Chinese tech corporations, instead of big foreign ones. “It may be too early to declare that Jack Ma has failed”, New York Times comment. “To the success and performance of the Chinese economy, Alibaba is more important than any other business,” commented Richard McGregor of the Lowy Institute. “The Chinese authorities want to continue reaping the benefits of Jack Ma’s company, but on their terms. Beijing doesn’t nationalize Alibaba. The company is just narrowing its operations.” “Alibaba has a perfect opportunity to grow into a world-class company,” said Wang Guoping, an official in Hangzhou city (where Alibaba is located), in the 2000s. “What a world-class company needs most is a soul, a leader, a world-class businessman. I believe Jack Ma meets those standards, “he added. Change your attitude According to Porter Erisman, one of Alibaba’s first executives, in the 2000s, most employees at Alibaba were just trying to make a lot of money. Jack Ma alone had another concern. He fears that one day the company will become too big. And Alibaba could be under pressure for holding huge market power. In 2011, Jack Ma understood that his ambitions could make regulators dissatisfied. Ma quietly took over Alipay – Alibaba’s payment service. That move angered one of Alibaba’s biggest shareholders – Yahoo -. However, according to Jack Ma, that is the action needed to meet the new Chinese regulations. Alipay later became Ant Group. As Alibaba grew, Jack Ma began meeting presidents and movie stars admired by many Chinese businessmen. “That changed the views of Jack Ma about himself and the Chinese government,” said Duncan Clark, Chairman of BDA China, commented. Mr. Simon Hu, CEO of Ant Group, resigned in March. Photo: New York Times. When Jack Ma stepped down as Alibaba chairman in 2019, a Chinese state-run newspaper commented: “There is no such thing as the Jack Ma era, only Jack Ma is part of this era.” Chinese leaders need the private sector to sustain economic growth. However, they do not want this area to exert too much influence on society. In October 2020, when Ant was preparing to go public (IPO), Jack Ma criticized Chinese financial regulators at a conference in Shanghai. He describes the Chinese banking system “operates like a pawnshop.” Shortly after, Ant’s IPO was ordered to be canceled. The Chinese government wants to continue reaping the benefits of Mr. Ma’s company, but on their terms Richard McGregor, senior fellow at the Lowy Institute “In China, it is difficult to say that the emperor is not dressed,” commented Kellee S. Tsai at the Hong Kong University of Science and Technology, referring to the short story “The Emperor’s New Clothes”. Mr. Ma has also rarely appeared since then. According to the source of the New York Times , in January, he showed up for an internal chat. The staff then shared Mr. Ma’s message to reassure everyone. Recently, the Hurun Report team (based in Shanghai) estimated that for the first time after 3 years, Mr. Ma was not among the three richest people in China. First place belongs to Mr. Zhong Shanshan, a well-known billionaire behind a group of famous bottled water and pharmaceutical companies.
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