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I'm not an expert on this, but from what I gather this all leads back to a power struggle between Jack Ma and Xi Jinping. Ma was ready to go public with AliPay

I'm not an expert on this, but from what I gather this all leads back to a power struggle between Jack Ma and Xi Jinping. Ma was ready to go public with AliPay and in the build up to it made a speech that criticised the government regulation as being out of date. This was viewed as a challenge to the governments power. Over the next few months the government moved to tighten regulations on companies like AliPay and disappeared Jack Ma. The government since then has basically completely taken over his entire empire, and sliced it up into pieces. This is basically Xi sending the message that private business in China will always defer to the government. All of this has natural absolutely tanked the value of China's tech sector. So people are hoping that now the worst of it is done and they no longer have enormous tech giants, but a series of smaller companies, that the government will return to being more hands off and in turn those smaller companies can return to more natural valuations.

voisin 4y ago
> So people are hoping that now the worst of it is done What is the basis of this hope?
- lanternfish 4y ago
  Presumably because Alibaba - the challenger that started this crackdown - is now slain. On a political level, there are only so many Chinese companies with enough power to actually threaten the CCP, and Alibaba is probably enough of an example to keep them in line - further crackdowns are probably unnecessary.
  - re-thc 4y ago
    There's been lots of "crackdowns" before Alibaba. Maybe "slain" as well but no not the only victim.
  - voisin 4y ago
    Must be nice for international companies to know that Chinese companies will always be restrained from becoming too large. It’s like they have to fight with one arm tied behind their back - get too big and your own government will cut you up.
    - kkarakk 4y ago
      xi jinping has been criticised for this but he's in his "my legacy lives on forever" phase of life. another decade and he's done - just consolidating power for his family at this point.
- AbrahamParangi 4y ago
  I think on some level people implicitly believe that the Chinese govt will choose prosperity over power because that's what they imagine they would do. I suspect that will never happen.
  - samstave 4y ago
    Prosperity IS power, but the chinese have a bunch of evil morons (as do most governments) in place that are more concerned with personal wealth than long term prosperity -- however, ironically, they are succeeding in a long term plan to basically own manufacturing for the planet. The USA is different in that the political fabric is myopically focused on personal individual wealth growth in a very short sighted obsession with only being re-elected usch that they can insider graft/trade and expand personal/familial wealth. The fact that we dont even openly talk about this problem... is the problem. Nancy pelosi (and family, dont think for a second she doesnt share her insidere trading info with her close circle, including her son who has also grifting business in ukraine.) is a prime example.
  - tpm 4y ago
    And I suspect you are right as long as current leaders wield the power. Periodical purges in all ranks of power and society are a time-tested feature of communist regimes. Without them the party cadres grow stale and lose their revolutional vigor. I can imagine it's a bit similar to how the free market works, with companies going bankrupt or taken over all the time, only there it's the changing conditions and the 'invisible hand of the market', while in communist dictatorships it's always intentional and directed (and way more brutal), because the rigid system does not self-regulate, at least not the way the leaders would like.
  - toyg 4y ago
    No, it's because that's what the previous generation of Chinese leaders did. Post-Mao, party elites have largely chosen wealth over power at critical junctures, maintaining an overall equilibrium. Xi Jinping broke that setup: there is no elite anymore, only himself; and he's made a point that wealth cannot be used as a shield from his power.
- deleted 4y ago
  [deleted]
- SilverBirch 4y ago
  Well, the problem was that Jack Ma was getting so powerful by being in charge of a massive tech empire he was threatening the CCP's power. The remaining split up companies are no where near as big or powerful, are staffed largely by people who have been put in by the CCP, and now know what happens to people who criticise the government. They've made their point, so the question is... why not ease up a bit and let prosperity return. Look at the absurd hype around AI in the US right now, I'd imagine the CCP would be quite worried that they're going to lose a strategic position in this technology if they don't ease up. Also, they've just got to ease up at some point right?
  - toss1 4y ago
    >>Also, they've just got to ease up at some point right? Nope. There is absolutely nothing (other than whatever good judgement they might have) that would prevent them from flying the entire craft straight into the ground. Agree that the problem for Jack Ma was he was becoming a threat to CCP power. He may have been able to pull it off and make a new countervailing power, but he spoke up too soon and CCP/Xi figured out the threat and took action. Maybe another player will be smart enough to stay below the radar for much longer, but it'll be years if not decades
TobTobXX 4y ago
Completely OT: > Over the next few months the government [...] disappeared Jack Ma. Huh, I've never seen "disappear" being used as a transitive verb. I kinda like it and I think I'll put it in my language toolbox.
- SkyMarshal 4y ago
  It’s quite common when talking about oppressive authoritarian regimes. https://www.google.com/search?q=%22disappeared%22 https://www.google.com/search?q=%22disappeared%22
- MengerSponge 4y ago
  It's a powerful phrase, associated with oppressive regimes. It should be used with the same level of care as "pogrom" or "reeducation".
- mc32 4y ago
  Yeah, it's informal but it used mostly for when a government illegally detains someone, often incommunicado --though historically in Latin American countries "disappearances" were a euphemism for government paramilitary forces (or revolutionary forces) taking someone behind the shed and extrajudicially executing them or in lesser cases locking them up in secret prisons. The choice of word probably stems from the stereotypical middle of the night night unwitnessed arrest. (so and so was supposed to come home at 8 but never came back)
  - the_af 4y ago
    In Argentina, one of the countries (along with Chile) where the term "desaparecido" (disappeared) was coined in the 70s, it means specifically: Government forces (not revolutionaries) which use either their official militaries/police (often) or their secret police (less often) to detain individuals without recourse to the law, then take them to illegal detention centers where they are tortured and eventually killed (in Argentina, some detainees were simply drugged and dropped alive to the Río de la Plata river, where they drowned -- our so called "flights of death" -- and others sometimes simply shot). The key thing that sets "disappeared" people aside from other ways of execution is that there is no official acknowledgement of their fate, and their friends and family are never truly sure of how they died unless their mortal remains are ever found by chance. If this sounds horrifying, always remember our militaries in Latin America were trained in these tactics by the US government, in things like the School of the Americas [1], under the guise of "learning how to fight insurgency". [1] https://en.wikipedia.org/wiki/Western_Hemisphere_Institute_for_Security_Cooperation https://en.wikipedia.org/wiki/Western_Hemisphere_Institute_f...
SkyMarshal 4y ago
Also, one of Ma’s last public appearances was at an American conference, maybe TechCrunch but I’m not sure, where he said in an on stage interview something to the effect of, “I’m not afraid of the CCP”, in relation to recent revelations he was a CCP member. Then he got disappeared shortly after. He was really clueless about what kind of org he was dealing with.
- hatsunearu 4y ago
  Jack Ma truly is clueless in general. There was a talk involving him and Elon Musk and it somehow was Elon coming out as the eloquent one in that conversation.
  - andy_ppp 4y ago
    I always do wonder about the reverence shown to billionaires around here, given the quite frankly ludicrous purchase of Twitter ($44bn!!!) and what has happened afterwards I really am not convinced they aren’t just as able as the rest of us.
    - midasuni 4y ago
      Americans tend to equate wealth with ability and set aside luck, everyone is a temporarily embarrassed millionaire. Musk certainly used to have decent business accuumin - he hit it big several times, that’s not just luck. From all accounts he’s a half decent engineer too, which is rare in many CEO levels. However his behaviour over the last 3 years has been very surprising. He seems to be less interested in the tech and more in the politics, which is a shame.
      - flangola7 4y ago
        I seriously doubt his engineering abilities, but I'll ignore that. One thing he's demonstrated from the beginning is a stark undersupply of emotional intelligence. There are noises that come out of his mouth that my 15yr old would roll her eyes at for being too self-centered and immature.
ptx 4y ago
Wasn't there also something about Alibaba specifically working on a money lending scheme which circumvented banking regulations and which regulators feared would create vast amounts of unsecured debt and destabilize the economy?
- PutinPoopin 4y ago
  That happened in China tho without Alibaba?
- SilverBirch 4y ago
  Yes, the original argument was essentially sparked because AliPay was doing a bunch of lending that wasn't really compliant with regulations and there was some discussion about whether the regulators would step in before the IPO. That's what caused Ma's speech about how the regulations were out of date. Whether that concerns was legitimate? Who knows.
freedomben 4y ago
Good analysis. Related: https://www.nbcnews.com/news/world/alibaba-founder-jack-ma-back-china-months-abroad-sign-beijing-may-warm-rcna76939 https://www.nbcnews.com/news/world/alibaba-founder-jack-ma-b...

voisin 4y ago

> So people are hoping that now the worst of it is done What is the basis of this hope?

lanternfish 4y ago
Presumably because Alibaba - the challenger that started this crackdown - is now slain. On a political level, there are only so many Chinese companies with enough power to actually threaten the CCP, and Alibaba is probably enough of an example to keep them in line - further crackdowns are probably unnecessary.
- re-thc 4y ago
  There's been lots of "crackdowns" before Alibaba. Maybe "slain" as well but no not the only victim.
- voisin 4y ago
  Must be nice for international companies to know that Chinese companies will always be restrained from becoming too large. It’s like they have to fight with one arm tied behind their back - get too big and your own government will cut you up.
  - kkarakk 4y ago
    xi jinping has been criticised for this but he's in his "my legacy lives on forever" phase of life. another decade and he's done - just consolidating power for his family at this point.
AbrahamParangi 4y ago
I think on some level people implicitly believe that the Chinese govt will choose prosperity over power because that's what they imagine they would do. I suspect that will never happen.
- samstave 4y ago
  Prosperity IS power, but the chinese have a bunch of evil morons (as do most governments) in place that are more concerned with personal wealth than long term prosperity -- however, ironically, they are succeeding in a long term plan to basically own manufacturing for the planet. The USA is different in that the political fabric is myopically focused on personal individual wealth growth in a very short sighted obsession with only being re-elected usch that they can insider graft/trade and expand personal/familial wealth. The fact that we dont even openly talk about this problem... is the problem. Nancy pelosi (and family, dont think for a second she doesnt share her insidere trading info with her close circle, including her son who has also grifting business in ukraine.) is a prime example.
- tpm 4y ago
  And I suspect you are right as long as current leaders wield the power. Periodical purges in all ranks of power and society are a time-tested feature of communist regimes. Without them the party cadres grow stale and lose their revolutional vigor. I can imagine it's a bit similar to how the free market works, with companies going bankrupt or taken over all the time, only there it's the changing conditions and the 'invisible hand of the market', while in communist dictatorships it's always intentional and directed (and way more brutal), because the rigid system does not self-regulate, at least not the way the leaders would like.
- toyg 4y ago
  No, it's because that's what the previous generation of Chinese leaders did. Post-Mao, party elites have largely chosen wealth over power at critical junctures, maintaining an overall equilibrium. Xi Jinping broke that setup: there is no elite anymore, only himself; and he's made a point that wealth cannot be used as a shield from his power.
deleted 4y ago
[deleted]
SilverBirch 4y ago
Well, the problem was that Jack Ma was getting so powerful by being in charge of a massive tech empire he was threatening the CCP's power. The remaining split up companies are no where near as big or powerful, are staffed largely by people who have been put in by the CCP, and now know what happens to people who criticise the government. They've made their point, so the question is... why not ease up a bit and let prosperity return. Look at the absurd hype around AI in the US right now, I'd imagine the CCP would be quite worried that they're going to lose a strategic position in this technology if they don't ease up. Also, they've just got to ease up at some point right?
- toss1 4y ago
  >>Also, they've just got to ease up at some point right? Nope. There is absolutely nothing (other than whatever good judgement they might have) that would prevent them from flying the entire craft straight into the ground. Agree that the problem for Jack Ma was he was becoming a threat to CCP power. He may have been able to pull it off and make a new countervailing power, but he spoke up too soon and CCP/Xi figured out the threat and took action. Maybe another player will be smart enough to stay below the radar for much longer, but it'll be years if not decades

TobTobXX 4y ago

Completely OT: > Over the next few months the government [...] disappeared Jack Ma. Huh, I've never seen "disappear" being used as a transitive verb. I kinda like it and I think I'll put it in my language toolbox.

SkyMarshal 4y ago
It’s quite common when talking about oppressive authoritarian regimes. https://www.google.com/search?q=%22disappeared%22 https://www.google.com/search?q=%22disappeared%22
MengerSponge 4y ago
It's a powerful phrase, associated with oppressive regimes. It should be used with the same level of care as "pogrom" or "reeducation".
mc32 4y ago
Yeah, it's informal but it used mostly for when a government illegally detains someone, often incommunicado --though historically in Latin American countries "disappearances" were a euphemism for government paramilitary forces (or revolutionary forces) taking someone behind the shed and extrajudicially executing them or in lesser cases locking them up in secret prisons. The choice of word probably stems from the stereotypical middle of the night night unwitnessed arrest. (so and so was supposed to come home at 8 but never came back)
- the_af 4y ago
  In Argentina, one of the countries (along with Chile) where the term "desaparecido" (disappeared) was coined in the 70s, it means specifically: Government forces (not revolutionaries) which use either their official militaries/police (often) or their secret police (less often) to detain individuals without recourse to the law, then take them to illegal detention centers where they are tortured and eventually killed (in Argentina, some detainees were simply drugged and dropped alive to the Río de la Plata river, where they drowned -- our so called "flights of death" -- and others sometimes simply shot). The key thing that sets "disappeared" people aside from other ways of execution is that there is no official acknowledgement of their fate, and their friends and family are never truly sure of how they died unless their mortal remains are ever found by chance. If this sounds horrifying, always remember our militaries in Latin America were trained in these tactics by the US government, in things like the School of the Americas [1], under the guise of "learning how to fight insurgency". [1] https://en.wikipedia.org/wiki/Western_Hemisphere_Institute_for_Security_Cooperation https://en.wikipedia.org/wiki/Western_Hemisphere_Institute_f...

SkyMarshal 4y ago

Also, one of Ma’s last public appearances was at an American conference, maybe TechCrunch but I’m not sure, where he said in an on stage interview something to the effect of, “I’m not afraid of the CCP”, in relation to recent revelations he was a CCP member. Then he got disappeared shortly after. He was really clueless about what kind of org he was dealing with.

hatsunearu 4y ago
Jack Ma truly is clueless in general. There was a talk involving him and Elon Musk and it somehow was Elon coming out as the eloquent one in that conversation.
- andy_ppp 4y ago
  I always do wonder about the reverence shown to billionaires around here, given the quite frankly ludicrous purchase of Twitter ($44bn!!!) and what has happened afterwards I really am not convinced they aren’t just as able as the rest of us.
  - midasuni 4y ago
    Americans tend to equate wealth with ability and set aside luck, everyone is a temporarily embarrassed millionaire. Musk certainly used to have decent business accuumin - he hit it big several times, that’s not just luck. From all accounts he’s a half decent engineer too, which is rare in many CEO levels. However his behaviour over the last 3 years has been very surprising. He seems to be less interested in the tech and more in the politics, which is a shame.
    - flangola7 4y ago
      I seriously doubt his engineering abilities, but I'll ignore that. One thing he's demonstrated from the beginning is a stark undersupply of emotional intelligence. There are noises that come out of his mouth that my 15yr old would roll her eyes at for being too self-centered and immature.

ptx 4y ago

Wasn't there also something about Alibaba specifically working on a money lending scheme which circumvented banking regulations and which regulators feared would create vast amounts of unsecured debt and destabilize the economy?

PutinPoopin 4y ago
That happened in China tho without Alibaba?
SilverBirch 4y ago
Yes, the original argument was essentially sparked because AliPay was doing a bunch of lending that wasn't really compliant with regulations and there was some discussion about whether the regulators would step in before the IPO. That's what caused Ma's speech about how the regulations were out of date. Whether that concerns was legitimate? Who knows.

freedomben 4y ago

Good analysis. Related: https://www.nbcnews.com/news/world/alibaba-founder-jack-ma-back-china-months-abroad-sign-beijing-may-warm-rcna76939 https://www.nbcnews.com/news/world/alibaba-founder-jack-ma-b...