Jack Ma is Beijing’s prodigal entrepreneur
HONG KONG, March 28 (Reuters Breakingviews) - In the biblical parable of the prodigal son, a repentant wastrel returns home to a forgiving and beneficent father. In China, Alibaba (9988.HK) founder Jack Ma's homecoming and rehabilitation appears to be part of an official campaign to revive flagging private sector investment. It is unclear who is forgiving who.
The e-commerce giant's Hong Kong shares briefly rallied 4% on Monday following a report from the South China Morning Post, which is owned by Alibaba, that the once-outspoken billionaire was back in the mainland. Having fallen dramatically afoul of President Xi Jinping after lashing out at financial regulators in a public speech in 2020, Ma, erstwhile patron saint of Chinese tech entrepreneurs, watched the companies he founded disciplined and his influence over them curtailed. Since late 2021 he has been travelling abroad studying agriculture, per the SCMP.
The timing for his well-publicised return to his hometown of Hangzhou, where Alibaba is headquartered, is probably not coincidental; Li Qiang, now China’s premier, had asked Ma to return to China to help boost business confidence last year, Reuters reported on Monday. Last weekend Li met with key foreign executives including Apple boss Tim Cook during the country's flagship investment summit and will deliver the keynote speech at another major gathering of business and political elites at the end of the month. All in all it suggests Beijing is intensifying a charm offensive to reassure entrepreneurs rattled by Ma’s defenestration and sector-wide crackdowns that the government still values them.
However, if officials believe the mere sight of Ma in public will revive business confidence, that hope has a whiff of desperation. Chinese venture capital investments in the first 11 months of 2022 plunged 42% year-on-year, to $73.5 billion, according to data from Preqin. The growth rate of investment in urban fixed assets by private companies is closing on zero, per Refinitiv Datastream.
A better way to reassure investors might be to clarify the status of Ant, the payments-to-credit group co-founded by Ma, which remains uncertain. Letting it revive its initial public offering, which was derailed after Ma’s jeremiad, would put money where Li’s pro-market mouth is.
Yet even as party officials talk up the private sector’s economic importance, they are strengthening political influence over business decisions. The recent detention of prolific tech dealmaker Bao Fan suggests the government is still in crackdown mode. Ma the prodigal entrepreneur has returned, but perhaps not for long.
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(The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Refiles to fix typo in last paragraph.)
Alibaba and Ant co-founder Jack Ma has returned to China, ending a more than year-long sojourn overseas, the South China Morning Post reported on March 27, citing people familiar with his schedule.
Ma visited a private school he founded in the city of Hangzhou, the headquarters of Alibaba and Ant, following a stop in Hong Kong, where he attended the city's Art Basel fair, according to the report. The school, Yungu Education, posted photographs as well as a video of Ma at the school.
China's new Premier Li Qiang had since late 2022 asked Ma to return to the mainland, hoping that this would boost business confidence among entrepreneurs, Reuters reported on March 27, citing sources.
Shares of Alibaba rallied as much as 4% in Hong Kong following the SCMP report before closing flat at HK$85.25 on March 27.
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