Chinese Communist Party hangs a sword over private tech giants in silence

Jack Ma and the Alibaba Group have recently come under a series of crackdowns by the Chinese Communist Party authorities. In one notable incident, enrollment at Lakeside University, which he co-founded, was halted, the word “university” was removed, and he himself resigned as president. Observers say that the Chinese Communist Party fears that the growth of “giant” companies like Alibaba poses a certain degree of threat to the Chinese Communist Party, so the “sword of Damocles” has been sheathed to suppress private technology giants, causing a chilling effect that can only be eliminated through democratic and constitutional institutions. The only way to eliminate the chilling effect is through a democratic and constitutional system.

Only “Lakeside” remains

“Jack Ma will step down as president of the elite business school (Lakeside University). This was the headline of an exclusive report in the Financial Times on May 23.

This is another high-profile position that Jack Ma resigned from after stepping down as chairman of the board of directors of Alibaba Group and officially retiring on September 10, 2019. Only in March 2018, Jack Ma, the first president of Lakeside University, vowed that “Lakeside University will run for 300 years!”

On May 13, China’s Ministry of Education, Ministry of Public Security, Ministry of Civil Affairs and other eight departments issued opinions on regulating the registration and use of “university” and “college” names, targeting the unauthorized use of “university” and “college” names. “, “college” name without approval, a comprehensive cleanup and rectification, and require all relevant departments within six months of the illegal use of “university”, “college “On May 17, the official microblogging account of Lakeside University changed the name of “Lakeside University” to “Lakeside Creative Research Center”.

A few days ago, photos circulated on the Internet showed that the word “University” was removed by workers with a gas torch from a huge horizontal stone in front of the school that reads “Lakeside University” in gold.

The Chinese official media People’s Daily Overseas Edition’s WeChat public number “Chivalry Island” posted an article on May 21, saying that although Lakeside University carries the name “University” and has many celebrities, it is essentially a private non-enterprise unit and does not belong to the sequence of academic education. The “Chivalry Island” said that there are currently 1,186 corporate “universities” in China.

The Voice of America reporter searched the official website of Lakeside University and found that the word “university” had been removed from all the “Lakeside University” pages, and the word “university” could not be found on the entire website. The word “university” is nowhere to be seen on the entire website. The “generic top-level domain” of Lakeside University’s website is .com, while all public and private university websites in China end with

Lakeside University was founded on Jan. 26, 2015 by nine entrepreneurs and renowned scholars, including Chuanzhi Liu and Jack Ma, to identify and train entrepreneurs with an entrepreneurial spirit. But the school, which trains elite entrepreneurs, was suddenly forced to drop its “university” “crown” after six years of enrollment and operation under the “Lakeside University” brand, and the new students who were scheduled to start at the end of March this year have been forced to leave the school. The registration of this year’s new students, which was scheduled to start at the end of March, was also stopped by the authorities. All this is not only directly related to the Chinese government’s regulation of the use of “university” and “college” names, but also closely related to the co-founder and president of “Lakeside University”, Jack Ma. The consequences

The consequences of calling out the authorities

Jack Ma, who has been China’s richest man for three consecutive years, and his Alibaba Group, have been in the spotlight in recent times. On October 24 last year, at the Bund Financial Summit in Shanghai, Jack Ma criticized the Chinese banking sector’s “pawnshop mentality” of requiring collateral for loans and said that “China is not a financial systemic risk, because basically there is no system in China, but rather China lacks the risk of a financial system. “China “lacks a healthy, systematic financial risk”.

Ma described himself as a layman, but he expressed a “professional view”. Ma’s views are considered to run counter to the Chinese authorities’ efforts to control risks in the financial system.

As early as Feb. 22, 2019, Communist Party General Secretary Xi Jinping stressed during a group study at the Politburo that financial security is an important part of China’s security, and that preventing and resolving financial risks, especially systemic financial risks, is a fundamental task of financial work.

More than a week after Jack Ma criticized the regulatory problems in China’s financial sector, four departments – People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission and State Administration of Foreign Trade – jointly conducted regulatory interviews with Jack Ma, the actual controller of Ant Group, and three others on Nov. 2. The following day, the Shanghai Stock Exchange announced that Ant Group’s IPO (Initial Public Offering), originally scheduled for Nov. 5 and worth more than $34 billion, had been suspended.

Since then, four Chinese financial regulators interviewed Ant Group officials twice, on Dec. 24 and again on April 12 this year, urging Ant Group to face up to its serious problems and draw up a plan to rectify them.

As the financial regulators interviewed Ant Group again, China’s General Administration of Market Regulation (GAMR) issued an administrative penalty on April 10 for Alibaba Group’s “two-for-one” monopoly on online retail platforms, ordering it to stop its illegal behavior and imposing a fine of RMB 18.228 billion. The amount of the fine imposed by the General Administration of Market Regulation (GAMR) on Alibaba for violating the Anti-Monopoly Law is unprecedented since the Anti-Monopoly Law came into force on August 1, 2008.

On April 13, the General Administration of Market Supervision, the Internet Information Office and the General Administration of Taxation jointly interviewed 34 Internet platform companies, asking them to take Alibaba’s heavy fine as a warning and to conduct a comprehensive self-examination and thorough rectification within one month. Before that, on March 12, the General Administration of Market Supervision imposed fines of 500,000 yuan on 12 Internet companies, including Tencent, Baidu and Meituan, in accordance with the provisions of the Anti-Monopoly Law.

Observers say that Jack Ma, as well as Alibaba and Ant Group, have been interviewed, heavily fined and suspended from listing in a series of actions considered by Chinese authorities to be “lawful”, showing the growing power of private companies, especially in the financial sector, which is a vital part of the country’s economic stability. These actions, which are considered by the Chinese authorities to be “lawful”, show that the authorities are stepping up their efforts to curb the growth of private enterprises, especially in the financial sector, which is a matter of national economic stability.

The CCP’s Iron Principles

Zhang Xun, a U.S.-based international business investment consultant, told VOA that the financial sector, where Chinese authorities are heavily involved, is a matter of stability for the Communist Party’s power and will not be allowed to grow freely and unregulated. Xi’s approach since taking power has been to reign in power, and since last year this reigning in power has been to restrict private companies in sectors of vital national interest, because in the CCP’s view, the power and influence wielded by private individuals and companies is always a threat to its dominance, so the authorities want to keep all aspects under absolute control.

The Chinese authorities’ regulation and suppression of technology giants is no longer a sword of Damocles hanging over them, this sword has been sheathed and opened, including Jack Ma, as a typical example,” he said. The suppression of creativity by this authoritarian system of the Chinese Communist Party is inevitable, a natural consequence.”

In an interview with Voice of America, Dr. Wang Juntao, a political scientist at Columbia University, said one aspect of the Chinese authorities’ crackdown on Jack Ma comes from more normal professional management. There is both a reasonable side to Chinese regulators making these decisions under the anti-monopoly law, but more than that, the political system in China makes it impossible for regulators to think only in terms of economic operations, national finance or social equity, which must be interspersed with many political considerations. Politically, he said, the growth of a “giant” company like Alibaba poses a certain degree of threat to the Communist Party.

He said, “The traditional Communist Party has had an ironclad principle since the beginning of its political establishment that it would never allow the emergence of an independent force in society that could create certain influential events in the country and that is not controlled by the Communist Party.”

Wang Juntao believes Ma’s development has largely clashed with Xi’s dictatorship. He said Ma is not challenging the dictatorship, but with Ma’s influence, if he were to really say something against it, his influence would be greater than Ren’s. For the Communist Party’s autocrats, because their ruling position does not have legitimacy, when a person like Ma appears, they assess whether that person will become their enemy and thus affect the solidity of their rule. Although Ma is a member of the Communist Party, he is a liberal at heart and would not like the Communist Party and would pose a threat to Xi’s dictatorship, Wang Juntao said.

Lakeside University, founded by Ma and nine other entrepreneurs and prominent scholars, has enrolled 254 students in the past five years from a total of 11,788 applicants, with an acceptance rate of about 2.15 percent. Strict admission requirements, including a system of recommenders and sponsors, and the students’ own entrepreneurial experience and qualifications, have given this private school a sense of mystery. Although Jack Ma said in 2017 that Lakeside University is not a circle, but a learning ground, the People’s Daily’s “Chivalry Island Public” said that schools like Lakeside University “do mainly capital joint things”. “People who come to school are more interested in how to enter the circle, expand their networks and find resources”.

On the other hand, some observers compared Lakeside University with the “East Forest Academy” in the Ming Dynasty, saying that “Ma Yuns” are like the “East Forest Party”, through the school to cultivate and expand interpersonal By running schools, they cultivated and expanded their networks, formed parties and cliques, cultivated personal power, formed interest groups, and became bigger and stronger, which are completely contrary to the absolute leadership of the CCP.

The Donglin Academy was a place of scholarship and lecturing during the Ming Dynasty in the 17th century, where public lectures were held regularly to discuss current affairs and to criticize the court eunuch Wei Zhongxian. The gentlemen and students associated with the Donglin Academy were called the “Donglin clique” by their political opponents. As the influence of the East Forest Academy grew, it offended the interests of the eunuchs and was suppressed. Some analysts argue that the influence of the Donglin clique intensified partisan struggles at the imperial court, endangering the stability and security of the court and giving rise to the peasant uprisings of the late Ming Dynasty, which eventually led to the fall of the Ming Dynasty.

Zhang Xun said he did not think entrepreneurs who grew up in the environment of the Chinese Communist Party’s heavenly dynasty had the consciousness of the feudal scholars of the Ming Dynasty back then, and did not have the backbone of the scholars either. He said entrepreneurs are only running universities to make a name for themselves in history, and that they do not dare or have the courage to challenge the current “imperial court” like the Donglin Party did under the authoritarian rule of the Communist Party.

He said, “It’s just that they are going in a direction that the ruling group feels is unacceptable to them. You may have separated from the authorities by doing business, and now you have created a university. Any university, research institution is bound to involve some out-of-the-box thinking, there are bound to be ideas and statements that are considered ‘heretical’ by the authorities. In this current political environment, the authorities can never allow it.”

Wang Juntao said that Lakeside University and the Eastwood School cannot be compared to each other, they are very different. The Donglin clique is an organized faction that spans political and intellectual circles, including central and local forces. Lakeside University is far from a political faction, and the authorities are more worried about the potential threat posed by the rallying of Lakeside University and Jack Ma.

Chilling effect

Against the backdrop of increased regulatory scrutiny by Chinese authorities, on March 12 this year, Ant Group CEO Hu Xiaoming announced he would step down from his post, and on March 17, Huang Zheng, founder of one of China’s largest online shopping platforms, Poundland, also announced he would step down as chairman. Byte Jump announced on May 20 that founder Zhang Yiming will step down as CEO at the end of this year and take a backseat. Hu is 51 this year, Huang Zheng is 41, and Zhang Yiming is only 38. They are still far from the generally accepted retirement age of 60.

Zhang Xun said these people are stepping down from the spotlight while they are still young and strong, raising concerns that the authorities’ punishment of Jack Ma, Lakeside University, Ant Group and Alibaba has had a “chilling effect.

Not only does it show that entrepreneurs smell the chill, but you can see that the ruling authorities are indeed tightening their grip on this,” he said. Anything you say that makes them feel uncomfortable can be acted upon. It’s just more of an escalation of the chilling effect kind of behavior.”

Wang Juntao said that, in general, Chinese entrepreneurs are not that sensitive politically, and only when someone is “slaughtered” and there is a cascading reaction of “rabbits dying and foxes grieving and things hurting,” will there be a resonance.

He said: “Since ancient times in China, the gun to beat the head bird. So, Ma Yun ‘wood show in the forest, the wind will destroy. Not many of his peers ‘beat’ him, rather it is the Communist Party or Chinese society that somehow does not allow people to be too good. If you’re too good, even if you’re good for a while, you’ll end up miserable later.”

The chilling effect of the Chinese authorities’ crackdown on private companies is also evident in the May 6 quote by Wang Xing, founder of Meituan, on Meituan’s social media platform, “Dianfu,” about the Tang Dynasty poet Zhang Jie’s “Burning Book Pit. The poem is an exaggeration of the relationship between the burning of books and the fall of the country, with the phrase “the ashes of the pit are not yet cold and chaotic in Shandong, but Liu Xiang did not study” thought to be a reference to Xi Jinping, the leader of the Chinese Communist Party. Although Wang Xing quickly deleted the poem, Shanghai authorities interviewed Meituan executives on the grounds of consumer protection, and Meituan’s stock price fell 9.8 percent on May 10.

Some online compared Wang Xing’s poem to Ma’s Bund speech, sending shivers down the spine as people worried whether Wang Xing would follow Ma’s lead and be suppressed by authorities in the future.

Wang Juntao said that the reason why private companies such as Alibaba, Tencent, Byte Jump and Meituan have grown to the scale of industry leaders is that, in addition to the innovation and efforts of entrepreneurs, more importantly, there are various interest groups and top Communist Party family forces behind these companies. He said that anything in China, once it reaches a certain scale, will all involve politics. On this issue, entrepreneurs must keep a clear understanding.

He said, “If you don’t have a political mind, sooner or later you will be planted in politics, and you will be planted very badly, not because of anything else, but because you are not guilty, but ‘wistful’ because you have reached a scale, but you are not yet politically ‘conscious ‘.”

Wang Juntao said, China only to establish a democratic constitutional government, entrepreneurs can have real security, property security, personal safety.

The once scenic Lakeside University, whose core word “university” no longer exists, has only ended up with a “lakeside” companion. The future of this entrepreneurial academy, which aims to cultivate the entrepreneurial spirit, will only be proven by time.