#ryan mcmorrow

[indizombie]

Ma had attracted trouble long before last year. His cult-like following helped him build unrivalled influence for a businessman in China, but he became too powerful in a country that only allows a single centre of power. Now supreme leader Xi is threatening to crush him, in a contest that captures the contradiction at the heart of modern China — the Communist party’s wary embrace of the capitalists who power the country’s economic growth. As Xi has tightened control over Chinese society, he has reinvigorated state-run companies and brought the country’s oligarchs to heel. Billionaire run-ins with the state over regulatory concerns, corruption or other perceived slights have become so frequent in recent years that a new rule has emerged: lie low. Some, such as Wang Jianlin, founder of real-estate conglomerate Wanda, have fallen silent while shrinking their businesses; others, like Wu Xiaohui of insurance conglomerate Anbang, have ended up in jail, with their empires taken over by the state.

Ryan McMorrow and Sun Yu, ‘The vanishing billionaire: how Jack Ma fell foul of Xi Jinping’, Financial Times

[indizombie]

By the mid-1990s the country was changing fast. Chinese leader Deng Xiaoping had unleashed society’s selfish impulses nearly two decades earlier, spurring on private business with his line: “Black cat or white cat, if it can catch mice, it’s a good cat.” The economy was off to the races, starting a decades-long growth spurt that made China the world’s second-largest economy and a global power. The private sector was leading the way and many state-owned enterprises withered or reformed. The Communist party became ever more dependent on the private sector for growth, job creation and tax revenues. In 2002, the Communist state formally brought the growing capitalist class into its fold, with President Jiang Zemin championing the “Three Represents”, a political theory that recognised private entrepreneurs as “advanced social productive forces”. But the relationship was fragile and China continued to favour state-owned companies with access to loans and licences.

Ryan McMorrow and Sun Yu, ‘The vanishing billionaire: how Jack Ma fell foul of Xi Jinping’, Financial Times

[indizombie]

The country’s tech groups in particular are in for change. Alibaba and Tencent expanded mostly unchecked over the past two decades, growing to control vast swaths of the digital and even physical economy. Authorities fined Alibaba a record $2.8bn for abusing its market dominance and ordered the company to “rectify” its behaviour, and regulators quickly followed by announcing a plan to shrink Ant’s business. Ma’s rivals have been quick to understand which way the wind is blowing. At China’s annual legislative session last month, Tencent’s Pony Ma proposed tighter regulation of internet businesses such as his own and has had a “voluntary” meeting with antitrust authorities. JD.com called off the IPO of its finance unit and put a compliance officer in charge. Colin Huang of ecommerce juggernaut Pinduoduo exited the company he founded altogether — after giving away a large chunk of shares over the summer in what one friend said was a move designed to keep his name from topping the rich list.

Ryan McMorrow and Sun Yu, ‘The vanishing billionaire: how Jack Ma fell foul of Xi Jinping’, Financial Times

[indizombie]

China was changing, but Ma appeared not to have realised how much. Empowered by amendments to the constitution that removed term limits on the presidency, Xi had become its most powerful leader in decades. Any form of public dissent was risky and Xi had made a crackdown on high debt levels and financial-sector risk a top priority, as officials worried that a US-style systemic financial crisis could shake the economy and even their hold on power. Ant’s size and scale had grown by leaps and bounds since Ma had taken it from Alibaba, and regulators were just beginning to understand its vast scope when the company made public its financial details for the first time in August last year. The very details that made investors so excited — its consumer loan issuance that eclipsed every state-owned bank, its annual payment volume that surpassed China’s GDP — made regulators in Beijing wary. “Ant’s business is inherently risky, we can’t count how many meetings executives have had with officials to get us through to today,” says one employee.

Ryan McMorrow and Sun Yu, ‘The vanishing billionaire: how Jack Ma fell foul of Xi Jinping’, Financial Times

[indizombie]

Ma, 56, stepped down as executive chairman of Alibaba in 2019. He hasn’t had a formal role at Ant in years, but remains its controlling shareholder after taking the business from Alibaba and its testy foreign investors about a decade ago. Yet even as he stepped back in title, Ma continued to involve himself in running both companies, say people close to him. He remains one of the world’s most important entrepreneurs and has become an unofficial goodwill ambassador for China, donating thousands of ventilators and more than 100 million face masks to countries around the world at the start of the pandemic last year. He sits on UN committees and his Rolodex includes kings and queens, presidents and prime ministers.

Ryan McMorrow and Sun Yu, ‘The vanishing billionaire: how Jack Ma fell foul of Xi Jinping’, Financial Times

[organisemybiz]

ZTO Express of China Has Largest U.S. I.P.O. This Year The delivery company, which helps connect retailers with shoppers in a vast market, raised $1.4 billion in the biggest Chinese I.P.O. in America since Alibaba. by RYAN MCMORROW in NYTBusiness Day HERE