China’s government has asked the e-commerce giant to divest its media publishing business out of concern over Alibaba’s influence in Chinese public opinion, sources quoted by the Wall Street Journal disclosed on March 15.
The sources said the discussions began earlier this year as part of an investigation by regulators reviewing Alibaba’s list of publishing holdings. Authorities were alarmed by the extent of Alibaba’s involvement in the publishing world and asked for plans to make significant reductions. But the authorities did not specify which specific investments Alibaba was required to exit from.
Alibaba Group, founded by Chinese billionaire Jack Ma, is known to have built up a strong portfolio of corporate investments over the years in areas involving print, broadcast, digital and online media, as well as advertising. These include acquisitions and investments in popular Chinese online media such as Weibo and the Hong Kong-based South China Morning Post. Such influence is seen as posing a serious challenge to China’s Communist Party and its powerful propaganda tools, the sources said.
The Wall Street Journal notes that the pressure on Alibaba after Communist Party leader Xi Jinping personally called off plans for an Ant Group IPO underscores the Communist Party leadership’s position that values statist supremacy over business. This threatens to erode the spirit of innovation and competition that has driven China’s economic growth in recent decades.
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