Jack Ma, the most famous businessman that China has ever produced, avoids the spotlight. Friends say he paints and practices tai chi. Sometimes he shares drawings with Masayoshi Son, the billionaire head of the Japanese conglomerate SoftBank.
The wider world caught a glimpse of Mr. Ma for the first time in months last week, at a virtual board meeting of the Russian Geographical Society. While President Vladimir V. Putin and others discussed Arctic affairs and leopard conservation, Mr. Ma could be seen resting his head on one hand and looking deeply bored.
For Mr. Ma – the charismatic entrepreneur who first showed how China would shake the world in the Internet age two decades ago; whose faces adorn shelves full of admiring business books; which has never met a crowd he could not blind – it is a strong change of pace.
Led by Xi Jinping, the chief leader of the Communist Party, China has punished and shamed a series of tycoons who amassed immense wealth and influence but have been seen to exceed their borders. Ma and the crown jewels of its online empire, e-retail titan Alibaba and fintech giant Ant Group, are Beijing’s biggest targets so far as officials begin to regulate the country’s powerful internet industry like never before.
US and European officials have been trying to rein in internet giants for years. But it is hard to imagine that Western regulators would bring about as much of a change in fortune as the one that happened to Mr. Ma. Mr. Xi has widespread control over the Chinese private sector and demands commitment to the party and to social stability over profit.
Once a trusted financial lieutenant to many Chinese elites, Xiao Jianhua was snatched from a luxury Hong Kong hotel in 2017. Ye Jianming, an oil magnate seeking contacts in Washington, was detained, as was Wu Xiaohui, whose insurance company bought the Waldorf. Astoria Hotel in Manhattan. Mr. Wu later went to prison. Lai Xiaomin, the former chairman of a financial firm, was executed this year.
“The general rule of thumb is that there should be no individual centers of power outside of the party,” said Richard McGregor, a senior fellow at the Lowy Institute and author of “The Party: The Secret World of China’s Communist Rulers.”
Beijing’s approach to technology is already rippling through boardrooms outside of Alibaba’s.
Ant Group CEO Simon Hu stepped down in March. A few days later, Colin Huang stepped down as chairman of Pinduoduo, the mobile bazaar he founded and made public within a few years. Pinduoduo announced its resignation on the same day it had attracted 788 million customers in the past 12 months – a larger number than Alibaba.
At a political rally that month, Pony Ma, founder of social media giant Tencent, proposed tougher rules for internet businesses – or, as one official newspaper put it, “innovative methods of regulation and governance.”
Last week, the Chinese antitrust authority convened 34 top internet companies to discuss new rules for fair competition. Within hours, they were discussing business changes and publicly pledging to stay in line.
“These new regulations will require internet platforms to look at how they innovate in the future, and the result may be less innovation,” said Gordon Orr, a non-executive board member at Meituan, the Chinese food delivery giant.
Still, Alibaba and other internet titans have a status in China that could protect them from the most harsh treatment. Officials have praised the titans’ economic contributions, even as they tighten up surveillance. Mr. Xi wants China’s economy to be driven more by its own innovations than those of fickle foreign powers.
That means it may be too early to call out Jack Ma for the count.
“His business is far more important to the success and functioning of the Chinese economy than any other business owner,” said Mr. McGregor. “The government wants to keep reaping the benefits of its business – but on their terms. The government is not nationalizing Alibaba. It does not confiscate its assets. It just shrinks the field in which it operates. “
Alibaba declined to comment.
Mr. Ma is not a neophyte in dealing with the authorities in China.
He briefly worked at a government-run advertising agency before founding Alibaba in 1999. At the time, China was still getting used to the idea of powerful private entrepreneurs, and Mr. Ma proved adept at charming government officials.
“Alibaba definitely has the opportunity to grow into a world-class company,” said Wang Guoping, then Communist Party secretary from the eastern city of Hangzhou, where Alibaba is located, in the 2000s. most needs is a soul, a commander, a world-class businessman. Jack Ma, I believe, meets this standard. “
Mr. Ma saw early on what its success could bring to China, said Porter Erisman, an early Alibaba director.
“There was only one person in the company who brought to our attention that one day we could have problems with being so big that we would come under pressure because we have too much market power,” said Mr. Erisman. “And that was Jack.”
Mr. Ma expressed concerns at a staff meeting in the mid-2000s, Mr. Erisman said. At the time, he added, most Alibaba employees “were just thinking, ‘How are we ever going to make money?’ ”
In 2011, Mr. Ma got a taste of how his ambitions could lead shareholders and regulators in the wrong direction. He quietly took over Alibaba’s payment service, Alipay, which angered one of Alibaba’s biggest investors, Yahoo. Mr Ma said the move was necessary under new Chinese regulations. Alipay later became Ant Group.
“The transfer of Alipay encouraged him,” said Duncan Clark, who has known Mr. Ma since 1999 and is chairman of BDA China, a consulting firm. “He got away with it a little bit.”
As Alibaba grew, Mr. Ma was courted by presidents and movie stars, as well as a wider group of fellow Chinese entrepreneurs. This “echo chamber” can capture Mr. Ma about himself and his position with the government, Mr. Clark.
Otherwise he might have seen the writing on the wall, especially since Mr. Xi has encouraged private companies to work more closely with the state.
When Mr. Ma stepped down as chairman of Alibaba in 2019, a comment in the Communist Party’s official newspaper stated, “There is no so-called Jack Ma era – only Jack Ma as part of this era.”
Chinese leaders need the private sector to support economic growth. But they also don’t want entrepreneurs to undermine the party’s dominance in society.
Last October, as Ant prepared to go public, Mr. Ma spoke at a conference in Shanghai and criticized China’s financial regulators. He had long viewed Ant as a means of disrupting the country’s major state-owned banks. But there could hardly have been a less convenient time to point out this point. Officials halted Ant’s stock listing shortly after.
In China, “it is hard to say that the emperor has no clothes these days,” said Kellee S. Tsai, a political scientist at Hong Kong University of Science and Technology.
Mr. Ma has also largely disappeared from view within his companies. In January, he appeared in an internal chat group to answer a business question, according to a person who saw the message but was not authorized to speak in public. Employees later shared Mr. Ma’s message to reassure nervous colleagues.
Recently, the Shanghai research group Hurun Report estimated that for the first time in three years, Mr. Ma was not one of the three richest people in China. The new No. 1 in the country was Zhong Shanshan, the restrained head of both a bottled water giant and a pharmaceutical company.
When his water company went public last year, Mr. Zhong was so little known that Chinese news reports of his sudden wealth had to explain to readers how to pronounce the obscure Chinese character in his name.