The Chinese authorities are concerned about the business environment in the republic amid two years of turbulent decisions that have undermined confidence in Beijing. To reverse the trend, they have several times invited back to China the founder of the Alibaba group of companies, Jack Ma, who for many is still the personification of the local entrepreneurial environment. President Xi Jinping’s entourage believes that Ma’s return to China would help restore the former attractiveness of the Chinese economy, writes Bloomberg agency, citing sources close to the authorities and the Chinese businessman.
Jack Ma fell out of favor with the Chinese authorities after criticizing them back in 2020. Sources claimed that the Chinese establishment was then extremely dissatisfied with the too free statements of the entrepreneur about the inadmissibility of excessive control of business by the authorities. Officials were especially outraged by comparisons with “archaic practices” that, according to Ma, are being implemented by the Chinese authorities. The entrepreneur himself has been living outside of China for a long time, the media previously claimedthat he moved to Japan.
Beijing’s pressure on Jack Ma effectively launched a vetting program against China’s biggest tech companies that led to a crash on the stock market. Shares of Tencent, JD, Alibaba, TAL Education and even electric car companies, which are considered among the most sought after by investors, fell by 20-70%. Moreover, the authorities demanded that their tech giants invest in social programs that Beijing lobbied for. Funds from them were to go to the most vulnerable segments of the population.
The agency notes that such a policy was carried out in order to consolidate support for Xi Jinping on the eve of the election for a new term of the Chinese President. Now that he has been re-elected, China’s leader intends to come to grips with the economy and return a quality business climate to the country. The sources say that the top echelons of government were negotiating with Jack Ma so that he could return to China and thus be able to positively influence the Chinese business environment. However, at the moment, Jack Ma has not given his consent. Sources close to the businessman emphasize that he intends to focus on the study of agricultural technologies and even took a course on sustainable farming and fish farming.
Moreover, Ma made it clear to the top management of his companies Alibaba and Ant Group that he did not intend to actively influence their work. He is quite satisfied with the current role, when he can follow their progress from a distance. The Chinese authorities, as the agency notes, are not entirely satisfied with this situation, since Ma’s refusal to return to the country can be perceived by the market as a negative signal. Moreover, the new Chinese Prime Minister Li Qiang delivered a keynote speech that was supposed to convince the business community.
“Last year there was a wrong discourse that caused concern among private entrepreneurs. The authorities must put pressure not only on the brakes, but also on the gas pedal, too, ”the official said during the National Congress, assuring that the authorities were ready to provide“ unwavering support ”to business.
The agency’s experts note that business is not yet ready to regain its trust in the Chinese authorities. The defeat of private initiatives, pressure on private business, including the education sector popular in China, will remain in the memory of foreign investors for a long time to come. A separate place is occupied by the desire of one of Jack Ma’s structures to conduct an IPO (initial public offering).
Investors remember well that just a few weeks before Jack Ma’s listing, the Chinese authorities inspected the company, banned it from its core business of providing loans, and canceled what should have been one of the most ambitious IPOs among Chinese companies. Despite the fact that Ant Group still intends to go public, the timing of the new IPO has not been announced, and the structure of the company, its core business, is already significantly different from what the company offered its clients two years ago.
