The founder of Alibaba, Jack Ma, has been missing from the public view for about two months now, instigating speculations about his safety in the face of altercation between his business empire and the Chinese authorities.
In October, Ma publicly criticized Chinese regulators at a conference in Shanghai, for some rules of the financial sector. He described the regulations as “old people’s club” and said that “we can’t use yesterday’s method to regulate the future.” Ever since then, things had not been the same for the 56 years old billionaire. He was invited by regulators for investigation, and vanished from public eyes ever since.
In late December, Chinese regulators launched an antitrust investigation into the country’s biggest e-commerce company, Alibaba. That’s after the government introduced rules that halted scheduled initial public offering for Ant Group, Ma’s fintech company.
Another event that stoked suspicion took place in November. Ma was removed as a judge on the African Business Heroes, an African talent show he founded. He was billed to appear in the finale, and tweeted that he couldn’t wait to meet with the finalists, but was abruptly replaced.
Last week, the Chinese government ordered Ant Group, the owner of Alipay, China’s largest digital-payment platform, to scale back its operations and rectify some business practices.
While all these happened, Ma’s voice was not heard nor was he seen in the public, betraying the outspokenness and poster boy attributes he has been known for.
In 1999 when Ma convinced his friends to lend him $60,000 to start a new business in China, it was in a bid to develop an e-commerce idea he conceived while he traveled to the United States. He had been shown the internet while on his trip and he vowed to make something out of it. So in the corner of his bedroom, Ma gave birth to Alibaba, an online market store which has metamorphosed into an estimated $51 billion platform.
Considering his poor background, it was a grass-to-grace story, and it made him a darling of the Chinese Communist Party, and he was even seen as an ambassador who would bridge the technology gap between the US and China.
The former English teacher has gone ahead ever since to develop other tech ideas, including the Ant Group, formerly known as Ant Financial and Alipay, an affiliate company of the Alibaba Group. Alipay has become the largest digital payment platform in China, making Ma the richest person in the South Asian country until recently, when his page in the good book of Chinese government was revisited.
Therefore, Ma is no longer the darling he used to be. The Communist Party has other priorities which they deem more important than the internet evolution that is creating billionaires in China, challenging US’ dominance. Ant Group’s $37 billion initial public offering which would have valued the company at more than $300 billion, and was going to be the largest in history was halted.
But that was just the beginning of Ma’s pangs of distress. Triggered by his October comments, the Chinese government’s regulatory clampdown on his online empire has instigated 17% decline in Alibaba’s market value, and dropped the once China’s richest man in the third position with a $63.1 billion net worth, according Bloomberg Billionaires’ Index.
“The fintech clean-up considerations would not have been an issue [for the authorities]. But everything changed after the speech… Xinhua News agency publicly attacked Ma,” professor of finance at the Hong Kong University, Chen Zhiwu, told Financial Times.
Although events like this are not new in China, Beijing has a history of ruthlessly clamping down on its internal critics no matter the economic cost. In March, a property tycoon vanished after he called Chinese president Xi Jingpin a clown, in a defiant criticism of how he handled the coronavirus outbreak.
In 2014, another billionaire businessman, Guo Wengui, got in the way of the authorities and had to flee China. He made a video interview in 2019 where he described himself as a whistleblower who exposed corruption in the country. One thing he said that people can’t stop talking about now is that Ma would likely end up in jail because China wanted to “take back” Ma’s lucrative Ant Group.
Considering China’s record in handling dissents, Ma’s disappearance is not far from all the speculations so far. But it may spell doom for the country’s economy, especially as the second largest economy in the world is working to build post-COVID-19 economy in the face of degenerating economic sanctions from the US.
Ma has been a leading light of China’s unique approach to generating wealth in accordance with its strict communist framework, and represents an economic future which many investors want to reckon with. His disappearance is stoking so many questions about China’s readiness to operate a free market, and sends a clear message that there is no sacred cow in Beijing’s determination to quell dissension. And that’s a scary development that will hurt investments in companies of Chinese origin, and will undermine the country’s prospects of overtaking the US as the world’s largest economy.