Chinese tech entrepreneur Jack Ma, founder and former chairman of eCommerce Giant Alibaba and formerly the wealthiest man in China, has recently announced plans to restructure his fintech empire Ant Group after falling out of favour with Chinese Communist Party leadership. Along with his recent muted reappearance after disappearing for nearly three months, this marks Ma’s complete submission to the CCP and represents the symbolic victory of Chinese President Xi Jinping’s plan to reassert party dominance over China’s economy.
China’s post-Mao transition to a “socialist market system” saw explosive growth in its private sector, including an internet boom in the ’90s. And while system-disrupting, swashbuckling entrepreneurship has been a driving force behind this boom, the rapid rise of China’s current tech giants could not have happened without tacit party support at the least, including generous state funding and help eliminating foreign competition. Since coming to power, Xi Jinping has sought to greatly increase party involvement in private enterprises, from backdoor takeovers to pressuring private firms to create party committees, to punishing executives with flamboyant public personas.
Ma, despite maintaining an extravagant persona, had avoided the party’s wrath for longer than most, even stepping down from a day-to-day role in Alibaba, his e-commerce empire. This was interpreted by many as a move to reduce party scrutiny on his growing power and popularity. However, as opposed to other entrepreneurs, he did not submit to the party rhetoric. While others have been courting the party’s favour, from crediting company growth to “Xi Jinping Thought on Socialism” to slathering praise on the Communist party, Jack Ma has stood out as a more independent voice.
In a speech he gave in October, Ma criticized China’s financial regulators, reportedly invoking the personal involvement of Xi Jiping in halting the imminent IPO of Ma’s Ant Group. Followed by an antitrust investigation and a warning to Ma not to leave the country, the CCP’s reining-in of Ma’s empire and persona left many questioning whether Ma would become yet another seemingly all-powerful tycoon who disappeared into China’s carceral system for criticizing the party. Jack Ma’s humble reentry into the public eye, appearing in a live-streamed address to rural educators, has quelled these fears, but such a huge deviation from his characteristic bombast seems to suggest his buckling to the CCP.
Though public sentiment has, as it often does in Xi’s China, followed the party in turning on Jack Ma, the people of China have the most to lose to the increasing party control over Chinese firms that Ma’s taming represents.
Neither investors nor the Chinese people are directly threatened by a further economic slowdown many associates with state-dominated growth models. Xi has a history of allowing privatization and free markets when necessary, even from his time as Governor of Zhejiang, and many have posited that increased CCP control may benefit the already-stagnating economy by acting as ‘industrial policy on steroids’. If anything, despite clearly recognizing concern over CCP economic intervention, foreign enthusiasm for investing in China has only increased. It is clear that the constant scrutiny of party committees, limits on economic freedoms, and even human rights abuses count little against China’s advantages of easy exploitation of labour, low corporate taxes, and logistical centralization. Investors will not suffer from Xi’s reassertion, and indeed do not even seem too concerned about it.
Instead, the CCP’s tightening grip on the Chinese economy will be disastrous to the rights and power of ordinary Chinese people, even without considering how an extension of state control over Chinese internet giants may exacerbate China’s high-tech Orwellian state. There have long been calls for China to redistribute wealth—and in turn power—among its people, yet the CCP seems dead set on doing the opposite: having centralized economic power into a core group of elite firms and executives, it is easier now for Xi to grab the reins. In supporting the expansion and agglomeration of power into corporate giants like Ma’s, China has limited the possibilities for entrepreneurship; in now tethering these giants beneath party control, the CCP is demonstrating that even the most successful cannot escape its grasp.
In China’s “socialist market economy”, money is still power, but by taming the face of Chinese entrepreneurship, the Communist party has signalled that while firms may be too big to fail, no one is too big to regulate.