Jack Ma appears to have scared the life out of China’s political elite.
The Alibaba Group founder has been persona non grata since Beijing canned the record-breaking US$37 billion initial public offering of fintech affiliate Ant in November.
Just days earlier, Ma had compared major Chinese banks to “pawnshops.”
Since then, President Xi Jinping’s ruling Communist Party has become alarmed at the sheer size of Alibaba and its massive media portfolio such as the South China Morning Post in Hong Kong.
“China’s government has asked Alibaba to dispose of its media assets. Discussions over the matter have been held since early this year [after] officials were shocked at how expansive Alibaba’s media interests [had] become,” The Wall Street Journal reported, citing people familiar with the matter.
- Ma has barely been seen in public since his controversial speech at the Bund Summit 2020 in Shanghai.
- Regulators have since rushed in new fintech rules which will seriously affect Ant’s lending model of matching 500 million borrowers with small regional banks.
- New rules that take effect next January will mean Ant will have to shrink its business with regional lenders, reducing its competitiveness.
- Beijing now appears to be targeting Alibaba’s media assets.
- Apart from the SCMP, the group also has a stake in the Twitter-style Weibo social media platform.
- Other social media investments include the YouTube-like streaming site Youku Tudou, entertainment portal Alibaba Pictures Group, and video-sharing Bilibili.
What was said: “The purpose of our investments in these companies is to provide technical support for their business upgrade and drive commercial synergies with our core commerce businesses. We do not intervene or get involved in the companies’ day-to-day operations or editorial decisions,” Alibaba said in a statement as reported by The Wall Street Journal.
Another viewpoint: “The authorities have toughened their stance towards the Alibaba group as a whole, so the sale of media assets is likely a part of that. This may be the start of a push to dismantle the group, including the media segment,” a regional government source said as reported by Nikkei Asia.
Delve deeper: Ma took a verbal pickax to China’s regulatory policy in his Shanghai speech. “We must reform the current system. We must do away with the ‘pawnshop’ mentality of today’s finance. [The] system [has become a] legacy of the Industrial Age. We must set up a new one for the next generation and young people,” he said.
China Factor comment: President Xi was reported to be furious with Ma’s address and his attack on official Party financial policy. Even though he has stepped down from the day-to-day business at e-commerce giant Alibaba, Ma is still a national icon. If this latest plan by Beijing goes ahead, it will be seen as another move to “dismantle” the online house that Jack built.