Speculation is mounting that Ma is being treated in the same way as other Chinese billionaire businessmen who were deemed to have grown too big for their boots and a danger to the authorities.

Where is Jack Ma? Three months ago, this ebullient billionaire was introduced as the speaker at the 2020 Bund Summit, a financial conference in Shanghai. Before an audience that included Chinese government officials, he talked about the planned $37 billion stock listing of his massive Ant Group the following month, which he claimed would have been the largest not just in China’s history, but “the largest in human history”. At the time, his wealth was estimated by the Bloomberg Billionaires Index to be $61bn. A few weeks later, as a result of his Bund appearance, it had dropped to $50bn. Clearly a very expensive speech for the diminutive 5’3” Jack Ma. What’s more, until a mysterious 43-second video suddenly appeared on Wednesday, he hadn’t been seen or heard of since the speech.
In a world of “deep fakes”, many are wondering if the image was the real Jack Ma or just an avatar. In the undated video, published by the Chinese state media, he appeared strangely unreal, blandly talking about “education”, which some commentators interpreted as “re-education”. They were left uncertain whether Jack Ma is actually living and breathing. Nevertheless, shares in his jubilant company soared by $40bn in one day.
Jack Ma, or to give him his proper Chinese name, Ma Yun, was already treading on thin ice before his Bund speech. In 2019, Forbes ranked him 1st on its “World’s Most Powerful People” listing and he was seen as a global ambassador for Chinese business and role model for start-up businesses. Two years earlier he had been ranked 2nd in the annual “World’s 50 Greatest Leaders”, just ahead of Pope Francis. When you live in a Leninist country such as China, these accolades can be dangerous to your health, making you a target. It’s therefore a good idea to keep a low profile, something impossible for exuberant Ma. He made the crass error in his Bund speech of criticising the Chinese financial system as a “legacy of the Industrial Age”, operating with a strong “pawnshop mentality”. These comments were said to have infuriated President Xi Jinping, who decided it was time to silence him and limit his power.
Speculation is mounting that Ma is being treated in the same way as other Chinese billionaire businessmen who were deemed to have grown too big for their boots and a danger to the authorities. Back in 2015, Guo Guangchang, chairman of Fosun International, went missing and was said to be “assisting in certain investigations” by the Chinese authorities. He has yet to re-appear. Two years later, Xio Jianhua, another billionaire, vanished completely from public sight after being snatched in Hong Kong. It took until last year for the authorities to confirm that he was still in mainland China “cooperating” with them in order to “restructure” his business group. In March last year, property mogul Ren Zhiqiang vanished after criticising Xi’s cover up of Covid-19 information. Calling Xi Jinping a “clown” was not helpful to his cause and six months later a court in Beijing sentenced Ren Zhiqiang to 18 years in jail for “abuse of power”. Add to these the case of billionaire Lin Qi, a 39-year-old video magnate who was found dead in Shanghai, reportedly poisoned, and you get a graphic picture of disappearances and untimely deaths of wealthy Chinese businessmen over recent years.
At first sight, the Jack Ma and Ant saga may resemble a bog-standard row between a financial innovator and the Chinese authorities. Ant is 33% owned by Alibaba, the e-commerce giant founded by Jack Ma. It’s best known for Alipay, which dominates China’s $17 trillion online payments market and reaches over 700 million people, more than 50% of the population. Today Alipay is more widely used than cash or credit cards in China and straddles two of the most scrutinised sectors in business nowadays: finance and technology. More importantly, the saga exposes the current debate in China between financial innovations on the one hand, and control on the other. Control is crucially important to the Chinese Communist Party (CCP) and the integrity of the state banking system and rigid control over finances are sacrosanct.
The problem for budding Chinese entrepreneurs is that there is no true private sector in China, only a mix of quasi-property rights and ambitious businessmen such as Jack Ma. The CCP, acting as the state, can reach into and control any of the supposedly “private sector” firms like Alibaba at any point. China watchers have learned that, unlike in parliamentary democracies, the 90-million-member CCP is not just a political grouping that directs the government from above, it IS the government for all intents and purposes and contains a large part of the capacity to make the state work.
Xi’s China is not some kind of generic authoritarian capitalist regime, as believed by many western leaders, but an aspiring totalitarian country, which is something entirely different. When Xi was elevated to the head of the CCP in 2012, many Chinese elites hoped that he would deal with mounting corruption, which he did in a highly authoritarian fashion. They also hoped that he would lay the ground for a more liberal China that would permit more freedom to talk, think, interact, and even criticise their government. They were therefore bitterly disappointed when he moved in the opposite direction, placing priority above everything on the survival of the CCP. The CCP doesn’t mind people becoming rich, as long as the status that wealth confers is not used to mount anything resembling a political challenge. This is a fundamental rule in China, which Jack Ma knew and successfully navigated for almost 20 years, but for unknown reasons he clearly breached in October, for which he is now paying the price.
In many ways, Jack Ma and Alibaba are a clear example of the wider tensions that have erupted in China in recent years between the ambivalent role envisaged by the private sector and the unquestioned role for the state sector. Recent directives, for example, have emphasised that the existence and development of the private sector in China is “long term and inevitable”. Xi is well aware of the critical role that private enterprise plays in generating employment, output and innovation, but he views the state sector, with the CCP at its helm, as the reason for China’s success—past, present and future. For this reason he is currently developing a hybrid system, where state-owned companies get more market discipline, and private enterprises get more party discipline. To accentuate the prime role of the party, however, he has embedded in both state and party Constitutions the “Xi Jinping Thought” slogan: “Government, military, society, schools, north, south, east and west —the party leads everything.”
So how does this affect businesses in China today? Over the past few years, Xi has required all private and public firms to have three or more party members close to operational management. New initiatives have also been launched to recruit private entrepreneurs into the party’s “united front of allies”, essentially meaning that if they toe the line and support the party’s objectives, they will receive favours and privileges. The time when private Chinese companies downplayed their links to the CCP is gone. A recent analysis has shown that nearly 400 of the 3900 companies listed on the stock exchanges in mainland China paid homage to the CCP in their annual reports last year, and references to Xi Jinping’s “guidance” have increased more than 20-fold since 2017. This trend reflects China’s new reality—the CCP has greater control over all aspects of life, and Xi has greater control over the party.
Jack Ma will have been fully aware of Xi’s intentions and directives and it’s curious to reflect on why he was inclined to throw down his gauntlet to the government in his Shanghai speech. He will also have known that in recent years the CCP under Xi has cracked down on the freewheeling finance and commerce, particularly the more extreme forms of egregious risk-taking and financial innovation. Perhaps he gambled that if the state took any action against him, such as pulling the listing of the Ant Group (which it did), international investors and financial firms would become more wary about building businesses in China. If so, the recent example of Hong Kong should have encouraged him to have second thoughts. He might also have reflected on the case of Mikhail Khodorkovsky in Russia, as Xi Jinping is clearly attracted by the Putin playbook in the treatment of wealthy citizens and their influence in politics. Khodorkovsky lost about $15bn and spent a decade in a Siberian prison for daring to challenge Putin. Xi Jinping is also a ruthless ruler, willing to let people become wealthy, but unwilling to tolerate any challenge to his absolute authority. That’s the lesson that Jack Ma, if he’s still alive, is likely receiving today.
The saga around Jack Ma and Ant has clearly damaged the reputation of China’s already fragile capital market. Recovery can only take place if Xi nurtures open, trusted and transparent markets in order to attract international investors to accept the opportunities to build businesses in China. This episode is a reminder that control and what China calls “stability maintenance” should be an essential element of risk assessment before financial firms decide to rush to invest in Xi’s empire. If they don’t, they risk losing everything, as could happen to Jack Ma.
John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998.