Jack Ma’s business empire has suffered successive blows from the Chinese Communist Party.
British media reported that Alibaba founder Jack Ma hired Cui Shufeng, former deputy director of the Chinese Ministry of Commerce’s Antitrust Bureau, as director of the Center for Competition Policy Research in 2019. Days before Chinese regulators imposed the fine on Alibaba, Cui Shufeng told Chinese Communist Party government officials that they should not be too harsh on Alibaba. However, despite this, Japanese media reports suggest that Ma and Alibaba are not completely out of the woods yet.
On April 21, the Free Times quoted the Financial Times as reporting that several Chinese online technology companies, including Alibaba, Tencent, Byte Jump, and Meituan, have begun hiring dozens of former Chinese officials from former anti-monopoly agencies, court judges, and others in an effort to moderate the Chinese Communist government’s purge of online technology companies.
British media said a review of public records revealed that Alibaba founder Jack Ma hired Cui Shufeng, former deputy director of the anti-monopoly bureau of the Chinese Communist Party’s Ministry of Commerce, as director of the Competition Policy Research Center in 2019. Days before the CCP regulator imposed the fine on Alibaba, Cui Shufeng told CCP government officials that they should not be too harsh on Alibaba.
On April 10, the CCP’s General Administration of Market Supervision imposed an administrative penalty on Alibaba for its “two-for-one” monopoly under the Anti-Monopoly Law, fining the company 18.228 billion yuan, the heaviest fine ever imposed in an anti-monopoly law enforcement case in China.
The aforementioned report argues that the fine imposed on Alibaba by China’s General Administration of Market Regulation could have been higher, although there is no evidence that Cui Shufeng’s conversation influenced the regulator’s decision. The aforementioned fine represents only 4 percent of Alibaba’s 2019 domestic revenue, and Alibaba could have been fined up to 10 percent of its annual revenue. Qualcomm was fined a record $975 million, or 8 percent of its revenue in China, for anti-competitive behavior in 2015.
It has also been reported that after Alibaba, Tencent, Byte Jump, Meituan and other online companies have begun hiring former Chinese Communist Party officials.
“This phenomenon is very common in the Chinese business community,” said Zeren Li, a doctoral candidate at Duke University who specializes in China’s state-business relations. Li Zeren said that Chinese public companies hired more than 4,800 executives and directors with government experience in 2019, but only 99 in 1999.
The Financial Times quoted former Communist Party officials as revealing that the career change is rewarding for former Communist Party officials who accept private sector employment, with their salaries increasing three to six times after joining private companies.
For his part, Nie Huihua, an economics professor at Renmin University in Beijing, warned that the practice of former officials accepting employment with private companies is likely to contribute to the market’s loss of trust in the regulatory system.
The Nikkei Asian Review reported on April 21 that Alibaba Group, China’s largest e-commerce company, is not yet out of the woods and its many media properties remain a concern for Communist authorities.
The report said Alibaba founder Jack Ma and Alibaba’s media influence has struck a nerve in Beijing, with some scholars saying the Chinese Communist Party authorities have taken the blocking of former U.S. President Donald Trump (Trump) by Twitter and Facebook as a warning, and are more interested in ensuring that the Communist Party is the only one who decides what content the Chinese can follow.
Alibaba is not only known for its online shopping platforms Taobao and Tmall, but it also has a huge media empire. Alibaba and Jack Ma personally now control media assets including online forums, news media, production companies, social media and advertising assets. Ali is the second largest shareholder in Weibo, as well as the South China Morning Post, Alibaba Pictures, and online video platform Youku.
The Nikkei reports that for Alibaba, these media platforms are effective tools to help users flow to other businesses as big tech companies race to build vast ecosystems from e-commerce to entertainment. But as these platforms expand their influence in content creation and distribution, Chinese Communist authorities, who have been closely monitoring these areas, are becoming increasingly uneasy.
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