Chinese tech companies did a pretty good job convincing global investors that they operated independently from the Communist Party. Now, Jack Ma has become a case study for the firms’ biggest skeptics.
Companies from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. splashed out billions on overseas acquisitions while developing apps and technologies that challenged Western rivals, with little or no state interference. But Beijing’s pursuit of Ma and his Ant Group Co. after he criticized regulators arguably plays directly into the hands of China’s biggest critics in Washington, who have long asserted that no Chinese tech giant or entrepreneur is beyond the reach of Xi Jinping.
U.S. authorities are now debating whether to ban investments in Alibaba and Tencent, according to people familiar with the matter, in what would be a dramatic blow to two of the companies whose shares are most widely held by global investors. Already on Tuesday, President Donald Trump signed an executive order banning transactions with eight Chinese software applications including Ant’s Alipay, and Tencent’s WeChat Pay, citing concerns that Beijing will have access to the data collected by the platforms. “I stand with President Trump’s commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party,” Commerce Secretary Wilbur Ross said in a statement on the order.
Beijing’s moves could raise pressure on the incoming Joe Biden administration to push through further action detrimental to China, though it’s not clear how much of Trump’s aggressive policies the president-elect will continue.
The party’s sway over business has become even clearer over the past 12 months as Xi pushes to consolidate power ahead of next year’s big party congress, when he’s expected to extend his rule for at least another five years. Covid-19 has only served to strengthen his grip, fueling a war-like campaign to steer the economy back on track and snuff out perceived threats to national security.
“You need to be very mindful of who ultimately controls regulations, who controls licensing -- of who’s in charge,” said Mark Natkin, managing director of Beijing-based Marbridge Consulting. “And if you forget and you start to be overly critical or take too much of a role that normally belongs to the party, then you’re going to get chopped down a notch or two.”
More at https://tinyurI.com/y3u7ggww
Companies from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. splashed out billions on overseas acquisitions while developing apps and technologies that challenged Western rivals, with little or no state interference. But Beijing’s pursuit of Ma and his Ant Group Co. after he criticized regulators arguably plays directly into the hands of China’s biggest critics in Washington, who have long asserted that no Chinese tech giant or entrepreneur is beyond the reach of Xi Jinping.
U.S. authorities are now debating whether to ban investments in Alibaba and Tencent, according to people familiar with the matter, in what would be a dramatic blow to two of the companies whose shares are most widely held by global investors. Already on Tuesday, President Donald Trump signed an executive order banning transactions with eight Chinese software applications including Ant’s Alipay, and Tencent’s WeChat Pay, citing concerns that Beijing will have access to the data collected by the platforms. “I stand with President Trump’s commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party,” Commerce Secretary Wilbur Ross said in a statement on the order.
Beijing’s moves could raise pressure on the incoming Joe Biden administration to push through further action detrimental to China, though it’s not clear how much of Trump’s aggressive policies the president-elect will continue.
The party’s sway over business has become even clearer over the past 12 months as Xi pushes to consolidate power ahead of next year’s big party congress, when he’s expected to extend his rule for at least another five years. Covid-19 has only served to strengthen his grip, fueling a war-like campaign to steer the economy back on track and snuff out perceived threats to national security.
“You need to be very mindful of who ultimately controls regulations, who controls licensing -- of who’s in charge,” said Mark Natkin, managing director of Beijing-based Marbridge Consulting. “And if you forget and you start to be overly critical or take too much of a role that normally belongs to the party, then you’re going to get chopped down a notch or two.”
More at https://tinyurI.com/y3u7ggww
