China’s giant digital companies were hit by a spring chill at the start of summer, as Alibaba Group, which has seen its share of ups and downs with Jack Ma’s “Speechgate” debacle, announced a quarterly loss of nearly 1 billion euros on Thursday, its first since going public. Two days earlier, another shopping platform, Meituan, saw its top executives interviewed after the group’s chief posted an ancient poem online that allegedly insinuated that General Secretary Xi Jinping had been the subject of two consecutive days of heavy stock market losses.
“Hit but not sunk!” That’s how AFP described Alibaba’s situation. Alibaba also came out to declare that the future is still good. Still good still good, observers feel the cold wind! Alibaba’s first huge quarterly loss was covered by a one-time, sky-high anti-monopoly fine. The company, long seen as a model of success for Chinese companies, was fined the equivalent of 2.3 billion euros by Beijing authorities last month for antitrust, a figure equivalent to 4% of Alibaba’s annual turnover in 2019.
Jack Ma, the founder of Alibaba and the man who essentially controls Ant Financial Services, gave a speech at a high-level financial conference in Shanghai last November, defying Chinese Vice President Wang Qishan, who spoke before him, to talk about financial risks, sharply criticizing that China’s problem is not financial systemic risks but the lack of risks in the financial ecosystem, and that “controlling risks to zero is the biggest risk”. He also criticized the regulatory authorities for “pawnshop thinking”, after which the “anti-monopoly” whirlwind raged, the Ant Group listing fizzled out, I was interviewed, and the Lakeside University he founded was called off enrollment. A few days ago, Jack Ma made a rare appearance in Hangzhou, and many netizens who appreciate the founder of Alibaba lamented that “Papa Ma” was not in good spirits and forced a smile.
The sky-high fine has seriously affected the performance of Alibaba Group, which lost 974.7 million euros in January-March in euro terms, and without the fine, the online shopping champion would have had a profit of 26.2 billion yuan, or the equivalent of 3.3 billion euros. Nevertheless, Alibaba remains optimistic about its prospects “given the potential of the Chinese market”, and indeed, who can get around Alibaba today? However, there are many signs that make investors extremely wary.
The Wall Street Journal quoted informed Chinese officials as saying that Ma’s speech in Shanghai in late October sparked outrage at the top of the Communist Party and that Xi Jinping personally called off the Ant Group’s IPO after Chinese authorities halted the upcoming IPO of Alibaba’s Ant Financial Services last year, according to an AFP report. Ma finally appeared at Alibaba Group headquarters in Hangzhou last week, wearing a blue body shirt, and many netizens got the kind of look they mentioned earlier.
Another scenario that drew widespread attention was the second consecutive plunge in the Hong Kong stock market this week by Meituan Group, which previously, at least unlike Alibaba, had not been subject to much political-level speculation about the group. But this time the drop has led to suspicions that it is related to a poem by Meituan president Wang Xing that reads “Liu Xiang did not study”.
Wang Xing, the founder of Meituan, posted a Tang poem “Burning the Book Pit” on social networks, which reads: “The bamboo and palm smoke have destroyed the empire, and the Guanhe River is empty and locked up for the ancestors and dragons. The ashes of the pit are not yet cold Shandong chaos, Liu Xiang originally did not study.” Some people interpreted the poem as an insinuation that Chinese Communist Party President Xi Jinping does not read or hates culture, while others said it reminds people of the tyrant Qin Emperor burning books and burying Confucian scholars to “preserve the kingdom”. In the end, it is difficult to protect ……
Since entering the stock market in 2018, shares of Meituan, backed by another online giant – Tencent – have soared, becoming one of the biggest companies in China’s digital sector in terms of valuation. On Tuesday, May 11, Meituan shares plunged 5 percent when the market closed, adding up to an almost 12 percent plunge since the opening week, and why, according to an AFP analysis, many investors suspect Meituan will be the next digital company to be fixed. Wang Xing quickly deleted the post, saying it was because people had given it the wrong interpretation.
But posting an ancient poem would cause such a market uproar, what a horrible political culture China has reached! That’s because Yin Jian is not far behind, with Alibaba in the past. AFP quotes analysts: “Beijing has launched a campaign in recent months to stomp out the online giants to limit their influence on society.”
One user who follows the stock market on Weibo commented, “Publishing such a cryptic verse at such a sensitive time is the best way to scare away investors.” Another netizen commented, “Before Ma Yun’s speech, after Wang Xing copied the poem, the end of the peak of life has come, natural disaster from the mouth. The move to make Alibaba “subservient” began last October, and Wang Xing’s “incoherent” poem raises fears that Meituan will suffer the same fate.