- Jack Ma returned to China after more than 12 months abroad, coinciding with the easing of the Chinese government’s crackdown on the technology sector.
- Alibaba shares rose following the return of its founder, but uncertainty persists.
- Problems with Alibaba subsidiary Ant Group’s IPO and the Chinese government’s regulatory crackdown on local tech companies continue to create problems.
After more than twelve months abroad, Jack Ma returned to mainland China. He did so last week, precisely when the Chinese authorities began to show some relaxation in their crackdown on the technology sector by issuing messages supporting private entrepreneurs.
The Chinese businessman, who is currently in the top 7 of the wealthiest people in his country with a net worth of $24 billion, paid a visit to a private school in Hangzhou, Zhejiang, as reported from Hong Kong’s reference newspaper and owned by Alibaba, the South China Morning Post.
Jack Ma was reportedly giving a talk related to education and technologies linked to ChatGPT, at the Yungu school.
The school, supported with private funds (no less a fact in China), founded in 2017 by the creators of Alibaba, claims that the entrepreneur had asked teachers and students to use the regenerative artificial intelligence bot ChatGPT to solve real problems, taking into account that AI will be part of the new educational and industrial era.
Jack Ma at center stage
Hong Kong-listed Alibaba shares rose nearly 4 percent following the return of its founder, as investors believe the return of one of the Asian country’s most popular billionaires is a positive…
The entrepreneur and executive chairman of Alibaba Group, who had been away from the media spotlight since the sudden discontinuation of FinTech company Ant Group’s $35 billion initial public offering at the end of 2020, had toured different locations around the world.
The trip to Hangzhou followed a stay in Hong Kong earlier this year, when it was reported that the businessman would meet with friends and financial executives in the Asian financial center.
Jack Ma returned to China
There is no certainty about the duration of his stay in Hangzhou, and representatives of the private Chinese consortium, as well as the Jack Ma Foundation, have not immediately responded to messages and questions from the world’s financial media on this issue.
As Chinese authorities cracked down hard on the tech sector, Jack Ma was abroad in places like Australia, Japan, the Netherlands and Thailand.
In an attempt to bolster the weak economic outlook and boost investor confidence, China’s top leaders have changed direction in recent weeks and now claim that the authorities will be more supportive.
In his first lecture as China’s premier, Shanghai’s former Communist Party chief, Li Qiang, assured that private entrepreneurs would enjoy a better environment and have more room to develop, while calling on government officials to care for and support private enterprises.
A giant with more future
The problems with China and Jack Ma began in November 2022, when the Beijing government suspended the initial public offering of Ant Group, a subsidiary of Alibaba, days before its listing citing regulatory concerns.
Ant Group, known for its popular digital payment platform, Alipay, was set to go public in a dual listing in Shanghai and Hong Kong, with expectations of raising more than $34 billion, which was to make it the largest IPO at the time.
However, the suspension left investors in limbo and raised questions about the regulatory scrutiny facing China’s technology sector.
The suspension of the IPO also had a significant impact, as it owns a 33 percent stake in Ant Group.
Alibaba’s share price plummeted, wiping out billions of dollars in market value and casting a shadow of uncertainty over its own IPO plans.
Alibaba had been considering a secondary listing in Hong Kong as the company sought to raise funds and broaden its investor base amid mounting regulatory challenges in the U.S. and China.
Regulations and excesses
Alibaba’s IPO troubles came amid a broader regulatory crackdown by the Chinese government against its local tech giants.
Chinese regulators tightened oversight of the country’s tech companies, including Alibaba, over issues such as monopolistic practices, data security issues and unfair business practices.
Ma also came under scrutiny by the authorities, further complicating matters.
Ma kept a low profile since Ant Group’s botched IPO, with reports at one point suggesting he was imprisoned in China.
In addition to the IPO suspension and regulatory scrutiny, Alibaba has also faced challenges in its core e-commerce business.
In December 2022, Chinese antitrust regulators fined Alibaba $2.78 billion for abusing its dominant market position, raising concerns about the company’s business practices and competitive landscape.
Alibaba remains a giant
Beyond all this, Alibaba remains one of the largest e-commerce companies in the world, with a wide range of businesses spanning ecommerce, cloud computing, digital entertainment and much more (you wouldn’t believe how much).
The company’s annual revenue reached $109.5 billion in FY2022, with a customer base of more than 1 billion users.
To get back on the growth track, Alibaba has launched plans to improve its corporate governance, comply with regulatory requirements and strengthen its risk management practices.
The company has also expressed its commitment to support China’s regulatory reforms and work closely with authorities to address any concerns.
All in all, the IPO remains uncertain as the regulatory environment in China continues to evolve.
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