Beijing And Jack Ma, In Love Again

There are few Chinese entrepreneurs that have had as much international appeal as Jack Ma. And even fewer whose disappearance from the public eye generated as many “where is he???” headlines as his did.

Well, as of this month, Ma is in Beijing, back in the good books of the Chinese Communist Party. On Monday, he was at China’s legislative symbol — the Great Hall of the People — at the behest of President Xi Jinping.

Ma sat in the front row no less, as Xi called on China’s biggest tech names to ‘show their talent’ and ‘create wealth and opportunity’. Those words signalled a reversal in fortunes, not just for Ma but the entire Chinese technology industry.

The sector has suffered the ire of the CCP since November 2020 — a time when Donald Trump was in his first US presidency and had only just begun blocking chip exports to China. It was also a time when Evergrande hadn’t fallen, the coronavirus pandemic hadn’t yet decimated the Chinese economy, and Beijing was more concerned about ‘common prosperity’ than managing a technology war with the US.

So when Ma chose to voice his frustrations with Chinese regulators at the time, Beijing didn’t bat an eyelid before killing off the $37 billion IPO of his Ant Group. And then the PRC government went on to systematically attack a host of other Chinese fintech giants and tech billionaires.

Today, Beijing has its wealthy techies right where it wants them - ready to innovate while knowing better than to fly too close to any governmental suns.

But did they really need more than four years and losses of over $1 trillion, for a ‘rectification’? Because China has needed its tech industry in full gear since at least 2022. So it’s worth asking — what’s changed now?

The simple answer is: Trump.

While his predecessor Joe Biden seemed to make a crackdown on China his single biggest mission, Trump’s stance on Beijing seems mixed, at best. Where Biden rallied as many American allies as he could to put Beijing on a leash, Trump has alienated almost every one of them. And Trump has charged Elon Musk with dismantling key American institutions, a role that, critics say, the Tesla chief has used for the benefit of China, a country where he has significant business interests.

Beijing, meanwhile, is milking the moment. It is touting itself as a friend of everyone from Latin America to Europe. It is promising “stability” in a “turbulent” world. And it has now allowed a full-on worldwide launch for DeepSeek’s AI model, when only two years ago its regulations delayed the public release of similar models even within China.

After all that, giving a pat on the back to its beaten-down but most powerful industry does indeed seem like a logical and smart next step.

Big talk, big money 💰️💰️💰️

That pat on the back, meanwhile, has gone a long way for Chinese technology stocks this week which had, until recently, been beaten out of shape.

Investment banks say Chinese shares look ‘investible’ again and can see billions of dollars of inflows now that Beijing is recognising the potential of firms like Huawei, BYD, Xiaomi and Alibaba in uplifting a stumbling economy. Watching Jack Ma shake hands with Xi has played a big role in that mood change too, some say.

But what is key to note here is that choreographed events will not be enough to carry market rallies. Bankers’ big projections depend entirely on Beijing’s willingness to adopt AI throughout the economy. And that will require loosening the grip of regulations and censorship that have been more of a noose around tech firms’ necks.

• Experts say China’s demand for road and air transport fuels has potentially already passed its peak thanks to booming electric vehicle sales.

• Top Asian chipmakers have been on edge this week following reports that Trump is now re-evaluating funding given out under the CHIPS Act.

• And India’s demand of $1.4 billion in back-taxes from Volkswagen is fanning concerns about the country’s confusing policies on foreign firms.