In Sep 2020, CCP issued a set of guidelines to help the state manage the risks and challenges that come with an expanded private economy. This, however, was a huge blow to Chinese-owned tech firms. They were already desperately trying to paint themselves as independent of government control and scrambling for a place with their US counterparts. From 2019, the Chinese government had begun lodging officials inside of major technology companies, including Alibaba. Reports also speculated that Ant Financial might be forced to pass a large chunk of shares to the government putting an abrupt stop to its plans for further global expansion.
A month later, Jack Ma was invited to the Bund Summit in Shanghai. He found the summit, described as an ‘open, pragmatic and internationally influential financial high-end communication platform’ on their website, (quite misleadingly as we will soon find out), an opportunity to speak his mind. With an outstanding career that etched China’s place in the global tech industry, one would think he was eligible to do so.
“China’s finance is like those of other fledgling developing countries. We are the young, as it were, when it comes to the financial industry. We do not have a fully-fledged, completely functioning ecosystem”, he said. To tread carefully, he threw in some quotes by president Xi Jinping and continued.
“Regulations can be divided into two parts, namely monitoring and controlling, and they are entirely different matters. Monitoring is about watching and paying attention to your development, while controlling is performed only when something goes awry or is predicted to go awry. However, we now have a situation in which the controlling force is very strong, while the monitoring force is obviously inept.” It didn’t stop there.
He went on to call out on how Chinese banks impede the growth of businesses. He reminded that the pawnshop mentality based on collateral as practiced in China wouldn’t be able to keep up with the global demands over the next 30 years.
The timing of the speech couldn’t have been worse. Wang Qishan, the current Vice President of the People’s Republic of China known widely as the president’s right-hand man had just called attention to the importance of ensuring that business doesn’t become the master of the state.
Jack Ma’s soft-spoken demeanour and humble words of introduction didn’t ease him out. The subtle yet strong attempt at chiding the regulators for curbing innovation in the country hadn’t gone well with the audience. He definitely crossed a line. To exacerbate the wound for the Chinese government, Jack Ma’s speech went viral on the internet. It was a political embarrassment. Jack Ma had to be put in place.