HomeChinaBeijing Moves in on Tech Mogul Jack Ma

Beijing Moves in on Tech Mogul Jack Ma

In October, leading Chinese entrepreneur Jack Ma offered criticism of the Chinese Communist Party (CCP), warning that the regime’s attempts to control financial risks would stifle innovation. Two months later, Ma is facing the repercussions. 

In early November, Ma even offered to hand over his Ant digital payment platform to the government “as long as the country needs it.” However, the CCP intervened to cancel Ant’s $37-billion IPO scheduled in November, with reports that the order was given by Chinese leader Xi Jinping personally. 

In an interview with Fox News, Jonathan T. Ward, author of China’s Vision of Victory, said that Jack Ma’s current situation is a perfect example of Beijing’s hold over private business.

“It shows you the nature of the relationship between Chinese companies and the Chinese state. They keep saying Huawei is not controlled by the government… The government has total power over these companies. Jack Ma was once thought of as an independent man in China. And then he was revealed to be a party member… And then under pressure, apparently offering pieces of his company to the CCP. And of course, the Chinese government has been doing everything they can to erase the lines between the private sector and the Chinese state. This is part of how they intend to do innovation. It’s part of how they intend to build their military capability. And that’s what you’re investing in when you’re investing in China,” Ward said on the program.

An Alipay logo is seen next to the Shanghai office building of its parent company, the Ant Group, in Shanghai on November 3, 2020. Jack Ma is the Chinese entrepreneur who runs these companies.
An Alipay logo is seen next to the Shanghai office building of its parent company, the Ant Group, in Shanghai on November 3, 2020. (Image: HECTOR RETAMAL / AFP via Getty Images)

On Dec. 18, President Trump signed legislation mandating that foreign companies listed on American exchanges must follow accounting standards set by the Public Company Accounting Oversight Board (PCAOB). Additionally, the companies must also disclose whether or not they are controlled by the Chinese government. It will put pressure on Chinese companies like Alibaba which will now have to follow American accounting procedures. 

Beijing currently blocks foreign regulators like PCAOB and the Securities and Exchange Commission (SEC) from inspecting Chinese companies by citing national security concerns. Ward states that America has to closely work with its allies so that Chinese companies that are delisted in the U.S for some reason do not end up moving to another international exchange, like London. This would allow the Chinese firm to continue having access to global capital.

American companies like Goldman Sachs and JP Morgan are trying to expand into China. Ward believes that U.S. firms do not have a clear idea of the threats Beijing presents. Chinese companies are part of Beijing’s grand strategy to expand and dominate global markets, which hurts American companies. Ward warns American CEOs and board rooms to start taking the China threat seriously and advises them to resolutely stand by the United States. He predicts that Fortune 500 is going to change radically over the coming years due to the rise of Chinese corporations. American firms need to be ready to face the challenge.

Chinese regulators have also announced that they will be conducting an anti-monopoly investigation of Alibaba Group. 

“The era of free growth and ultra-high growth is really over… The government will decide what you can do,” CEO of Geo Securities Ltd. in Hong Kong Francis Lun told Breitbart. The rise of Alibaba’s Ant platform has triggered concerns in the Xi administration since the financial platform competes with state-owned banks and cuts into their profits. Lun suggested that Ant is being attacked due to the threat it poses to the state-owned banks.

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