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Jack Ma returns to China as govt tries to quell private sector fears

2023-03-27T09:10:38Z

Jack Ma, billionaire founder of Alibaba Group, arrives at the “Tech for Good” Summit in Paris, France May 15, 2019. REUTERS/Charles Platiau

Alibaba (9988.HK) founder Jack Ma has returned to China, ending a more than year-long stay overseas that was viewed by industry as reflecting the sober mood of China’s private businesses and troubled policymakers trying to spur the economy.

The return of China’s best-known entrepreneur may help to quell the concerns of the country’s private-sector businesses after a bruising two-year regulatory crackdown. His public reemergence provides support for the government’s softening tone toward the private sector as leaders try to shore up an economy battered by three years of COVID curbs.

Online discussion saying that Ma was in China began emerging on Chinese social media early on Monday and his return was confirmed by a school he had visited and the Alibaba-owned South China Morning Post newspaper.

Ma, a former English teacher, discussed topics such as artificial intelligence-powered chatbot ChatGPT and also said he hoped to return to teaching one day during his visit, the Yungu School said on its official WeChat account. The school was founded by Ma and other Alibaba founders in the e-commerce giant’s home city of Hangzhou in 2017.

He returned to China last week, two sources with knowledge of the matter said. Reuters was not able to establish how long he plans to stay in China this time round.

Ma’s return “boosts the sentiment of the broader platform, internet industry,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management.

“Because that means the new top leadership has indeed been re-examining the position and the importance of the platform companies in China’s economic development. The previous restrictive policies on the platform, internet sector are also expected to be adjusted,” Zhang said.

Alibaba shares jumped more than 4% after news of Ma’s return broke before giving up some of its gains.

Ma’s stay abroad came to symbolize the reversal of fortunes for the country’s private sector after his empire and the technology industry were the targets of Beijing’s regulatory crackdown.

A speech Ma gave in 2020 criticising China’s regulatory system is commonly accepted as the spark for the tighter government scrutiny and triggered his public retreat. In late 2021 he left Mainland China and has been seen in photographs in Japan, Spain, Australia and Thailand.

While Chinese authorities have recently said they are easing the crackdown and would support the private sector, Chinese entrepreneurs and investors said they saw Ma’s decision to stay overseas as a factor hindering confidence.

Recognising this, China’s new Premier Li Qiang had since late last year asked Ma to return to the mainland, hoping that this would boost business confidence among entrepreneurs, five sources with knowledge of the matter told Reuters.

Some of these efforts involved asking people close to Ma such as his business associates to persuade the Alibaba founder in person while he was living in Japan, two of the sources said.

Reuters was not immediately able to establish whether Ma had returned due to Li’s efforts.

Alibaba and the State Council did not immediately respond to a request for comment.

Li, a close ally of President Xi Jinping, has been at the forefront of government’s effort to bolster the private sector, saying earlier this month that the country’s environment for entrepreneurial businesses will improve and that Beijing will treat all firms equally.

However, companies are hesitant, privately pointing to a lack of new supportive policies and the new regulatory framework the crackdown had brought.

That view is shared by long-time Asia analyst Fraser Howie, who has written several books on China’s financial system.

“I can see how this sort of signals a relaxation but none of the laws and institutions set up to control the private sector have changed,” he said.

“It doesn’t matter at all to private business because he is already beaten. The State won, Jack has lost control, power, wealth and its not coming back.”

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