I never worry about the regulations. Why not? Because I know I'm a good boy. I've interviewed Jack
Ma at least four times over the last 25, 30 years. In 2005, this was still at
early goings for Alibaba, I asked him how he stays
ahead of the regulators and he says... The government loves me, because I'm helping
them to create business. He had that brashness back in 2005. So that brashness has now come back and kind of nipped the
showman in the rear end. Over two decades ago, Jack Ma co-founded Alibaba. Today, it's China's e-commerce giant and one of the biggest
companies in the world. But recently, Ma and his tech
empire have been in trouble. In April, Alibaba was fined a record $2.8 billion
for monopolistic conduct. Its affiliate Ant Group, which Ma holds a controlling stake in, was ordered to overhaul its business after the abrupt suspension
of its IPO in November 2020. This was looking like a fairy-tale listing for Ant Group, but there's
now been a significant twist. And since then, Ma has laid low. Just being quiet is
something very notable, that we think of when we think of Jack, we think of him as very loud, brash. And so we're all a bit shocked
when he's not speaking. But Alibaba and Ant are
not the only tech firms in the sights of Chinese regulators. I think this is a watershed moment for China's tech industry. Some would say that the golden days of China's internet age
is practically over. So what does the future hold for China's tech giants? It's become the stuff of legend. In 1995, during a trip to the
U.S., the then-English teacher Jack Ma had his first
encounter with the internet at a friend's place in Seattle. I searched the first word, beer. I don't know why. Because
it's easy to spell maybe. And I see beers from
Germany, beers from USA, beers from Japan, but
there's no beer from China. Back home, he started China Pages, a Yellow Pages-like website,
but it didn't take off. By 1999, the internet stock
boom had gripped Wall Street. And back in his Hangzhou apartment, Ma decided to try again. With his wife and a
small group of friends, Ma set up Alibaba, a site that allowed businesses
to sell stuff to each other. In the same year, a newly
established company, Tencent, released its first product, OICQ, an internet messaging service. Alibaba came along. Tencent came along. They grew in certain
areas, like in gaming. Alibaba grew in e-commerce. But then their services just started mushrooming and mushrooming. Alibaba and its affiliate
Ant, along with Tencent, these are the twin pillars
of China's internet industry. You can think of their influence in terms of the products that they offer. So think of the most
powerful mobile internet apps in the U.S., and Tencent would be a
combination of all of them. Tencent's WeChat, for example, which is just one of its main services, is a combination of WhatsApp combined with services from
Uber, Spotify, Snapchat, there's also elements of TikTok and financial payment
services like PayPal as well. Alibaba is best known for
being an e-commerce giant, but the company has expanded so much beyond just its core business. It has businesses in sectors
like logistics, entertainment. Think of the biggest
blockbusters in the U.S. "Mission: Impossible" was
financed by Alibaba Pictures. So it's a very powerful conglomerate. Tencent and Alibaba's apps are used by a combined 1 billion people. Each company has a market cap over half a trillion U.S. dollars, and they've poured billions
into Chinese tech startups. Startups have to face the duopoly, and often they have to take
money from one of the two camps. And it's almost like an
offer that you can't refuse. Not taking money from
them can be detrimental. And if either Alibaba or
Tencent decides to invest in your competitor, the
consequences can be quite dire. Other than that, when
it comes to services, e-commerce players often do complain that they have to choose
between e-commerce platforms. It could be either Alibaba or its rivals. For over a decade, the Chinese government allowed
the internet sector to grow with little oversight as it wasn't yet considered
an essential industry. Beijing also hoped that
expansion of these companies could spur China's economy. Using the model of combining U.S. capital with China's best entrepreneurs
and also brainpower, China's internet sector or tech sector just grew into this giant
behemoth that overnight by the time the government realized that it had gotten so big, it was already out of their
control, some would say. The ability for them to
amass large amounts of data and combine it with
artificial intelligence gives them key insight
into 1.4 billion people and also key industries,
economies of the country, which is really something
that's at the core of the ruling party's concern. If these companies venture
beyond the edge of control, there is a risk that these companies pose to the ruling Communist Party. And power is at the core of everything and the priority for the ruling party. China putting the brakes
on the world's biggest IPO. Ant Group's listing in
both Shanghai and Hong Kong have been suspended. And this is really a
stunning turn of events. It was the most anticipated
initial public offering on record, and the money
was piling up to go into it. So in that essence alone, it was a dramatic
about-face from regulators because it had already
been given the go-ahead by securities regulators and
in the 11th hour it was pulled. This was going to be a
$30-plus billion IPO, but it all came apart after this speech, of course,
in Shanghai by Jack Ma, where he criticized the
regulatory environment. He criticized state banks for operating like pawn shops. And he didn't read the room very well, because the audience at the
Shanghai Bund conference was full of government officials. They did not take kindly to this. The Ant IPO debacle is the tipping point. And obviously, the
underlying policy tensions have been there for a really long time. So a lot of tension had been building up in the past 10 years. It just until this really smart event that the whole balance was tipped. Ant is China's largest fintech company, created in 2004 as a payment service to facilitate transactions to Alibaba. The company has expanded its business into wealth management,
credit lending and insurance. In the year to June 2020, it managed to process $17
trillion worth of payments. And at one point it had the
largest money market fund in the world. There has been a lot of complaints from the state-owned lenders
in the past few years about how Ant is
encroaching on their turf, especially in lending and
also wealth management. And the banks are held to
a different set of rules that are much more stringent whereas Ant has been able to sidestep a lot of these stringent rules by playing the role of
a fintech disruptor. And they added micro lending. And I say micro lending is just a name for prolific, mega, many,
many different small loans to shoppers across the many
different platforms of Alibaba. That posed significant risks because Alibaba only funded
about 2% of those loans, and the rest of those loans were securitized by the state banks. They took on the big risks. Just the day before Ant's IPO suspension, regulators released strict draft rules for online microlenders that would require Ant
to provide at least 30% of the funding for loans
it underwrites for banks and other financial institutions. That evening, Jack Ma was
summoned by regulators for a meeting. What we learned was that while
they didn't discuss details of the IPO, the message was clear, which is that the free-reining
days of Ant's business was coming to an end, and
things were about to change. That was probably the first inkling that things were not going
to go according to plan. But the writing on the wall
was actually already out there in the months proceeding that. There were a slew of rules
that already were rolling out since September that
curbed Ant's loan business. After Ant's IPO suspension, the company was ordered
to overhaul its business, turning it into a
financial holding company with similar regulations to a bank. Regulators also launched an
anti-monopoly investigation into Alibaba. In addition, there's
also said to be scrutiny of Jack Ma's growing media empire. He owns the South China
Morning Post in Hong Kong. He owns at least 30% of the
social-media platform Weibo, which is like a Twitter of China. He also has another media, Yicai, which is a very large media company that has an online presence in China. Regulators are said to
be looking very closely at the influence Jack Ma and Alibaba through those
holdings of media businesses has on Chinese society. Some would say that it's
the Chinese government that likes to have the final say in what information the public gets. Since the collapse of Ant's IPO, Ma, the face of China's new economy and the showman who always
takes center stage, vanished. Jack, are you there? Jack? Doesn't look there's anyone inside. He may be not showing
up, but he's not missing. He hasn't been captured. He hasn't been taken. Like many entrepreneurs in China, Ma had been walking a tightrope, balancing sometimes conflicting
demands from Beijing and foreign investors who
are eager to see growth. For many years, Jack Ma branded himself or tried to create this image
where he was a rebellion, where he revolted against the system, and was a troublemaker
fighting for the little guys. In love with the government,
but don't marry with them. I mean, this is... He's also extremely savvy, always appealing to the greater good, trying to convince the government why his company and the
services that they provide are good for job creation in China and also for China's image. It wasn't until earlier this year, 2021, that Jack Ma reappeared. He was talking about philanthropy, and the tone in which he gave his speech was so much more modest and humble compared with his speech in October. He was doing something that the government wants a man who is
worth $54 billion to do. And that is to talk
about poverty alleviation and building up and investing
in rural areas of China. These are messages the
Communist Party of China likes. You know, 10 years ago, I mean, it was a very
different, or 15 years ago, very different government back then. You had much more of a laissez
faire towards technology. You had also ineffective regulations or often overlapping
regulations, sometimes gaps. And Jack, I think assiduously
exploited some of those. Contrast that to today,
we see much less tolerance for regulatory problems. China's government has
really upped its game. You can no longer just bash government in the way that he did. So maybe Jack just didn't realize
that the game had changed. Just five months since the sudden collapse of Ant's IPO, regulators hit Alibaba with a record fine for monopolistic conduct. Ant is now in the process of an overhaul. Is the Chinese government
trying to limit Jack Ma? They don't want to limit
the national champions, OK? But they probably want to
knock Jack Ma's public profile down a notch a little bit. So I don't think Alibaba is
radically going to change. Its core will remain e-commerce. But I think for Ant,
yes, it's very different. What can Ant be without
this lucrative data business and lending business? That's a big question. The Chinese government has also launched an investigation into suspected monopolistic practices by food-delivery behemoth Meituan. 32 other tech firms like Tencent and TikTok owner Bytedance have been ordered to rectify
anti-competitive behavior. I think the regulatory uncertainty is going to be at the backdrop of just about every big tech story for the foreseeable future in China. From the government's standpoint, I mean, it's not in their
interest to see the tech companies to become smaller and weaker. It's just a different direction that the government wants these
companies to move forward. The antitrust regulation
will give smaller companies the opportunity and the room to grow, which is important. The trend where governments
are trying to rein in tech companies and break
down monopolistic practices is global. I think in China what differs
is that the tech companies have no power to fight back. When the government cracks down on them, ironically, what we saw with Alibaba is that they thanked the government. And that is something
that I don't think Google or Facebook is doing
in the U.S. right now. The end of the day, the Chinese government has the final say, and bend the knee or get broken.
If you guys wanna spend some time reading on Chinese (mainland) billionaires that sometimes disappear, read Inside the Red Mansion by Oliver August. There are some parallels to Jack Ma.
'A horse may pull the cart, but you do not ask it where it wishes to go.'
As far as CCP is concerned, he was an extraordinarily productive peasant. The minute he tried to influence policy he got slapped down hard.
I think there was another video on this subject a while back on this sub. I think it was this one:
https://www.arte.tv/en/videos/083456-000-A/china-the-disappearing-millionaires/
Alibaba Intelligence
Interesting they let him speak out for so long before "re-educating" him.
List of CCP Crimes Against Humanity:
Concentration camps with forced labor building goods sold to the west.
Kidnapping and torturing two Canadians citizens and a British Diplomat.
Organ Harvesting
Violating international agreements with Britain and denying the democratic rights promised to the people of Hong Kong.
Threatening our allies.
Threatening to invade Taiwan. A free democratic country.
Using its economic power to threaten our livelihood and that of our allies.
Using state controlled companies and assets to buy up Western Companies/assets and those of our allied nations.
Not abiding by the trade deal/opening of China in the 1970s that required a liberalization of their economy. (not having massive state controlled companies and allowing fair access to their markets)
Unlawful control of the south china sea and building of fake islands violating international agreements to claim territory.
Suppression and systematic destruction of the Tibetan, Mongolian and Uighurs people who live in China and other minorities.
Destruction of thousands of cultural sites in China - a practise that continues until today in order to suppress non han culture.
Things you can request to your democratically elected representatives:
Demand your leaders start ordering major companies switch production to outside of China.
Send home ALL CCP members and Spies.
Demand a long term plan for an Economic Embargo of China until such time as CCP China reforms its political and economic system.
Demand that all government contracts exclude all CCP related companies.
Express your support for your representatives to punish China for violating the right of the people of Hong Kong.
Work with our allies to lock China out of the western economy. Coordinate a global economic embargo until China reforms its government and economic system.
Seize all assets owned by state owned Chinese companies in the west.
Demand your government's open their doors to the people of Hong Kong and give them shelter.
Express your disgust for the mass concentration camps in China and genocide of minorities.
Not super related but I was a little surprised at his apartment and people can just walk up to his door and knock? Surely you’d think that someone worth 54B dollars would live in a mansion protected by fences and security?
Such is life when living in a tyrannical system, speak up loudly enough and you may never be seen again...