8 ms·

Jack Ma Agrees to Shrink His Business Empire, Bowing to China Pressure

113 points by sodrick 6y ago

f430 6y ago
Jack Ma was too high profile to disappear, from my Chinese co-workers, Jack Ma's shares have shrunken to almost nothing, this is just another one of the many "forced nationalization" except Jack gets to keep some of his assets. background info: With the trade war and sanctions on HK, the CCP is running low on currency reserves and is going after private property and ownership. Expect more Chinese billionaires to disappear for a while and happily praise their relinquishment of ownership. Side track but similar situation in S. Korea: Current Korean administration is also trying to force Jay Lee (Samsung Heir & ex-CEO) to sell a huge chunk of his shares to the government (would force the share prices to tank). Word on the street is Samsung is going to nationalize which would spell disaster for the Korean economy which relies 25% of its GDP on Samsung.
- liuliu 6y ago
  1. Jack Ma's share is not significant is known several years ago, because a. he was generous in given shares to people and that works better for BABA b. BABA hasn't been profitable for long time and has taken several rounds of VC money. These were the days without now common A / B class share structure. That was why BABA chose to use the innovative "partnership" structure to retain control (and also getting rid of Yahoo Japan's controlling shares) when IPOing. 2. private ownership != currency reserves. IF CCP is running low on currency reserves (which they don't at the moment, it was a few years back, since then they strengthened capital control), they can force the companies to pulling money back to the mainland, i.e. pumping up USD reserve and given out CNY to these companies. They don't need ownership. In fact, this happened to Wanda and Hainai Airlines a few years ago, when they invested aggressively overseas, and has since then pulled back the capital (sold these oversea assets) to mainland. The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership".
  - ardy42 6y ago
    > The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership". Also, dictators have no need to own anything (at least domestically). They already have the power, so what do they gain by "owning" something they already control? IMHO, private property/ownership is really only a useful concept when you have to allocate control among legally-equal(ish) peers. I think a lot of people really only understand their own place in their own society, and a lot of time they end up just projecting that onto some other situation when it doesn't really apply.
    - wincy 6y ago
      Right, Vladimir Putin is arguably one of the richest men in the world, but none of it is "on the books" as he just has dozens of "state-owned" palaces and mansions throughout Russia.
  - the-dude 6y ago
    The art of dicatorship, I heard it here first! There is apparently a movie by the same name about Iraqi art : https://www.journeyman.tv/film/1468/the-art-of-dictatorship https://www.journeyman.tv/film/1468/the-art-of-dictatorship ( 2002 )
  - f430 6y ago
    > The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership". wow. I can't believe I am reading this on HN.
    - Geminidog 6y ago
      Christianity is basically a dictatorship where god is the dictator. Many people consider Christianity to be a good thing, so it's not that hard to believe that a dictatorship can be more than just purely evil. Do not let your biased associations drive the meaning of a concept. Dictatorship, democracy, communism, capitalism and socialism are not inherently good or bad and they are not "teams" you should join or support. They are concepts that have examples of success and failure when executed in the real world.
- rexarex 6y ago
  It seems you may be getting downvoted by a lot of shills. Strangely the top-voted comments follow a very similar style in pro-china/anti-Ma posts with an intellectual sounding reply mentioning 'I was speaking with my friend/colleague/etc' as an appeal to popularity
29athrowaway 6y ago
Jack Ma made a kung fu short film where he fights Tony Jaa, Donnie Yen, Jet Li, among others. It is titled Gong Shou Dao.
balia 6y ago
Headline sounds propaganda-ish. This is a normal regulatory move to break up monopoly in its one market, instead it’s made to sound like “big bad gov bully’s little guys” Imagine a headline “Zuckerberg Agrees to Shrink His Business Empire, Bowing to US Pressure.” Does that sound like a natural headline a reasonable reporter would write?
- adventured 6y ago
  Bowing to US pressure is exactly what companies do when they come under regulatory pressure. It's not a strange headline at all. Companies with large market share routinely curb their own actions to limit or bow to government pressure that is always present. Intel would have eaten Nvidia and ARM a long time ago if that were not how things worked. Intel has been under 24/7 government pressure for decades. They're not allowed to behave the way Nvidia and AMD are allowed to behave, they're not allowed to acquire companies that some of their competitors are allowed to acquire. Intel has been on its knees bowing to government pressure for decades at this point, with two hands tied behind its back.
- kube-system 6y ago
  > Imagine a headline “Zuckerberg Agrees to Shrink His Business Empire, Bowing to US Pressure.” Does that sound like a natural headline a reasonable reporter would write? 1. A quick search with my favorite search engine for "bowing to US pressure" returns many results by a variety of reputable outlets. 2. I don't believe that reporters typically write their own headlines.
  - La1n 6y ago
    >A quick search with my favorite search engine for "bowing to US pressure" returns many results by a variety of reputable outlets. They are mostly (or all I could find on the first pages) about other countries or international organizations, so I'd say there is at least some difference.
- mcguire 6y ago
  Does the four month vacation at Lake Laogai enter into this picture anywhere?
ackbar03 6y ago
Personally I don't think this is necessarily a bad thing. Even before the government got involved I was a bit concerned at the rapid growth of personal consumer credit through platforms like Ant financial and it was something my friend and I would occasionally discuss. These fintech comapnies made it extremely easy to obtain a loan and actively pushed these financial products through advertisements. There were also growing numbers of anecdotes online and in real life of people who didn't necessarily know or understand the financial consequences of a personal loan and ended up sadelling themselves with debt they couldn't pay back. You have to remember that China is growing rapidly, for some people their previous generations were still farming somewhere in the countryside. Some of them may in fact still be in the countryside but have access to internet and a smartphone. They might not have the adequate financial literacy. Rapidly increasing consumer debt in an economy is not necessarily a good thing as more than demonstrated by subprime debt in the 08 financial crises. If completely unchecked, it is in the interest of a company like Any to keep pushing out loans, and it wouldn't be that they are knowingly doing anything wrong. However it might not be good for the rest of society. I think western media enjoys portraying this whole incident in some sort of nefarious light but I actually think it's a prescient and responsible move.
- bobthepanda 6y ago
  I don’t think anyone in the West disagrees that Ant and Alibaba are big, possibly too big. The problem is the means. The Western viewpoint is that it smells like the ends don’t justify the means, and China hardly has anything resembling rule of law.
  - bilbo0s 6y ago
    I'm a Westerner, so I know what you're saying. That said, on matters such as these, I think we've entered an era where the government of China does not care about the Western viewpoint. They see a potential threat to their economy, and they deal with it their own way. That's not good or bad, it's the reality of the more multi-polar era we're entering. How do we operate in this era? That's up to really smart people in the bowels of Western capitols. But in my own opinion, rule of law or no, I'm not sure going to bat for the likes of Ant is a hill we want to send soldiers to die on as they say. Ant itself was intended to flout the rule of International Law. How do we argue on its behalf in the name of "rule of law"? That squanders what little credibility we do have in China.
La1n 6y ago
This website just changed out some words from this BI article, blatant plagiarism. https://www.businessinsider.com/jack-mas-ant-group-plans-shrink-after-china-demands-wsj-2021-1?IR=T https://www.businessinsider.com/jack-mas-ant-group-plans-shr...
- yorwba 6y ago
  ... which links to the WSJ as their source. Not exactly plagiarism, but definitely reporting based on other people's reporting. https://www.wsj.com/articles/jack-mas-ant-plans-major-revamp-in-response-to-chinese-pressure-11611749842 https://www.wsj.com/articles/jack-mas-ant-plans-major-revamp...
  - simonh 6y ago
    Oh come on, the text of the Reality Vibes piece is literally a cut-and-paste from Business Insider with minor edits. At least BI wrote their own text, it might contain the same information but the structure and text of the article is original.
bg24 6y ago
In all honesty, happy that he is around and able to run his business somewhat freely. It is still pretty good. There were rumors of his well-being a few months back. One may argue that he decided to stand down and bow to all demands, no arguments. Otherwise, it might have been even worse. China is not USA. Both have pros and cons.
- mcguire 6y ago
  It seems difficult to come up with a pro that balances being disappeared for four months for criticizing the government.
  - bg24 6y ago
    Yes. Still better than not disappearing completely. You can only do so much when you're on control of a uber God.
ksec 6y ago
> "Ma, a larger-than-life figure, criticized China's financial regulatory system last year.He now appears to have been brought to heel by Beijing." You can be larger than life in China, you just cant be larger than CCP.
- jxramos 6y ago
  Because uh, CCP is, CCP is life. https://www.youtube.com/watch?v=pyUxsKTi2ZI https://www.youtube.com/watch?v=pyUxsKTi2ZI
- Layke1123 6y ago
  You can be larger than life in the US, you just can't be larger than the US military industrial complex or capitalism.
  - Layke1123 6y ago
    Instead of downvoting, can anyone explain why they downvoted?
BlasDeLezo 6y ago
I would've agreed too

113 points by sodrick 6y ago

f430 6y ago

Jack Ma was too high profile to disappear, from my Chinese co-workers, Jack Ma's shares have shrunken to almost nothing, this is just another one of the many "forced nationalization" except Jack gets to keep some of his assets. background info: With the trade war and sanctions on HK, the CCP is running low on currency reserves and is going after private property and ownership. Expect more Chinese billionaires to disappear for a while and happily praise their relinquishment of ownership. Side track but similar situation in S. Korea: Current Korean administration is also trying to force Jay Lee (Samsung Heir & ex-CEO) to sell a huge chunk of his shares to the government (would force the share prices to tank). Word on the street is Samsung is going to nationalize which would spell disaster for the Korean economy which relies 25% of its GDP on Samsung.

liuliu 6y ago
1. Jack Ma's share is not significant is known several years ago, because a. he was generous in given shares to people and that works better for BABA b. BABA hasn't been profitable for long time and has taken several rounds of VC money. These were the days without now common A / B class share structure. That was why BABA chose to use the innovative "partnership" structure to retain control (and also getting rid of Yahoo Japan's controlling shares) when IPOing. 2. private ownership != currency reserves. IF CCP is running low on currency reserves (which they don't at the moment, it was a few years back, since then they strengthened capital control), they can force the companies to pulling money back to the mainland, i.e. pumping up USD reserve and given out CNY to these companies. They don't need ownership. In fact, this happened to Wanda and Hainai Airlines a few years ago, when they invested aggressively overseas, and has since then pulled back the capital (sold these oversea assets) to mainland. The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership".
- ardy42 6y ago
  > The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership". Also, dictators have no need to own anything (at least domestically). They already have the power, so what do they gain by "owning" something they already control? IMHO, private property/ownership is really only a useful concept when you have to allocate control among legally-equal(ish) peers. I think a lot of people really only understand their own place in their own society, and a lot of time they end up just projecting that onto some other situation when it doesn't really apply.
  - wincy 6y ago
    Right, Vladimir Putin is arguably one of the richest men in the world, but none of it is "on the books" as he just has dozens of "state-owned" palaces and mansions throughout Russia.
- the-dude 6y ago
  The art of dicatorship, I heard it here first! There is apparently a movie by the same name about Iraqi art : https://www.journeyman.tv/film/1468/the-art-of-dictatorship https://www.journeyman.tv/film/1468/the-art-of-dictatorship ( 2002 )
- f430 6y ago
  > The art of dictatorship is strange, and requires much better understanding than just "evil takes over private ownership". wow. I can't believe I am reading this on HN.
  - Geminidog 6y ago
    Christianity is basically a dictatorship where god is the dictator. Many people consider Christianity to be a good thing, so it's not that hard to believe that a dictatorship can be more than just purely evil. Do not let your biased associations drive the meaning of a concept. Dictatorship, democracy, communism, capitalism and socialism are not inherently good or bad and they are not "teams" you should join or support. They are concepts that have examples of success and failure when executed in the real world.
rexarex 6y ago
It seems you may be getting downvoted by a lot of shills. Strangely the top-voted comments follow a very similar style in pro-china/anti-Ma posts with an intellectual sounding reply mentioning 'I was speaking with my friend/colleague/etc' as an appeal to popularity

29athrowaway 6y ago

Jack Ma made a kung fu short film where he fights Tony Jaa, Donnie Yen, Jet Li, among others. It is titled Gong Shou Dao.

balia 6y ago

Headline sounds propaganda-ish. This is a normal regulatory move to break up monopoly in its one market, instead it’s made to sound like “big bad gov bully’s little guys” Imagine a headline “Zuckerberg Agrees to Shrink His Business Empire, Bowing to US Pressure.” Does that sound like a natural headline a reasonable reporter would write?

adventured 6y ago
Bowing to US pressure is exactly what companies do when they come under regulatory pressure. It's not a strange headline at all. Companies with large market share routinely curb their own actions to limit or bow to government pressure that is always present. Intel would have eaten Nvidia and ARM a long time ago if that were not how things worked. Intel has been under 24/7 government pressure for decades. They're not allowed to behave the way Nvidia and AMD are allowed to behave, they're not allowed to acquire companies that some of their competitors are allowed to acquire. Intel has been on its knees bowing to government pressure for decades at this point, with two hands tied behind its back.
kube-system 6y ago
> Imagine a headline “Zuckerberg Agrees to Shrink His Business Empire, Bowing to US Pressure.” Does that sound like a natural headline a reasonable reporter would write? 1. A quick search with my favorite search engine for "bowing to US pressure" returns many results by a variety of reputable outlets. 2. I don't believe that reporters typically write their own headlines.
- La1n 6y ago
  >A quick search with my favorite search engine for "bowing to US pressure" returns many results by a variety of reputable outlets. They are mostly (or all I could find on the first pages) about other countries or international organizations, so I'd say there is at least some difference.
mcguire 6y ago
Does the four month vacation at Lake Laogai enter into this picture anywhere?

ackbar03 6y ago

Personally I don't think this is necessarily a bad thing. Even before the government got involved I was a bit concerned at the rapid growth of personal consumer credit through platforms like Ant financial and it was something my friend and I would occasionally discuss. These fintech comapnies made it extremely easy to obtain a loan and actively pushed these financial products through advertisements. There were also growing numbers of anecdotes online and in real life of people who didn't necessarily know or understand the financial consequences of a personal loan and ended up sadelling themselves with debt they couldn't pay back. You have to remember that China is growing rapidly, for some people their previous generations were still farming somewhere in the countryside. Some of them may in fact still be in the countryside but have access to internet and a smartphone. They might not have the adequate financial literacy. Rapidly increasing consumer debt in an economy is not necessarily a good thing as more than demonstrated by subprime debt in the 08 financial crises. If completely unchecked, it is in the interest of a company like Any to keep pushing out loans, and it wouldn't be that they are knowingly doing anything wrong. However it might not be good for the rest of society. I think western media enjoys portraying this whole incident in some sort of nefarious light but I actually think it's a prescient and responsible move.

bobthepanda 6y ago
I don’t think anyone in the West disagrees that Ant and Alibaba are big, possibly too big. The problem is the means. The Western viewpoint is that it smells like the ends don’t justify the means, and China hardly has anything resembling rule of law.
- bilbo0s 6y ago
  I'm a Westerner, so I know what you're saying. That said, on matters such as these, I think we've entered an era where the government of China does not care about the Western viewpoint. They see a potential threat to their economy, and they deal with it their own way. That's not good or bad, it's the reality of the more multi-polar era we're entering. How do we operate in this era? That's up to really smart people in the bowels of Western capitols. But in my own opinion, rule of law or no, I'm not sure going to bat for the likes of Ant is a hill we want to send soldiers to die on as they say. Ant itself was intended to flout the rule of International Law. How do we argue on its behalf in the name of "rule of law"? That squanders what little credibility we do have in China.

La1n 6y ago

This website just changed out some words from this BI article, blatant plagiarism. https://www.businessinsider.com/jack-mas-ant-group-plans-shrink-after-china-demands-wsj-2021-1?IR=T https://www.businessinsider.com/jack-mas-ant-group-plans-shr...

yorwba 6y ago
... which links to the WSJ as their source. Not exactly plagiarism, but definitely reporting based on other people's reporting. https://www.wsj.com/articles/jack-mas-ant-plans-major-revamp-in-response-to-chinese-pressure-11611749842 https://www.wsj.com/articles/jack-mas-ant-plans-major-revamp...
- simonh 6y ago
  Oh come on, the text of the Reality Vibes piece is literally a cut-and-paste from Business Insider with minor edits. At least BI wrote their own text, it might contain the same information but the structure and text of the article is original.

bg24 6y ago

In all honesty, happy that he is around and able to run his business somewhat freely. It is still pretty good. There were rumors of his well-being a few months back. One may argue that he decided to stand down and bow to all demands, no arguments. Otherwise, it might have been even worse. China is not USA. Both have pros and cons.

mcguire 6y ago
It seems difficult to come up with a pro that balances being disappeared for four months for criticizing the government.
- bg24 6y ago
  Yes. Still better than not disappearing completely. You can only do so much when you're on control of a uber God.

ksec 6y ago

> "Ma, a larger-than-life figure, criticized China's financial regulatory system last year.He now appears to have been brought to heel by Beijing." You can be larger than life in China, you just cant be larger than CCP.

jxramos 6y ago
Because uh, CCP is, CCP is life. https://www.youtube.com/watch?v=pyUxsKTi2ZI https://www.youtube.com/watch?v=pyUxsKTi2ZI
Layke1123 6y ago
You can be larger than life in the US, you just can't be larger than the US military industrial complex or capitalism.
- Layke1123 6y ago
  Instead of downvoting, can anyone explain why they downvoted?

BlasDeLezo 6y ago

I would've agreed too