How a Chinese billionaire flew near the sun

By Julie Zhu and Kane Wu

HONG KONG (Reuters) – It was supposed to be Jack Ma’s best hour: a year ago to the day, his group Ant was set to go public in a $ 37 billion torch of glory. Instead, Beijing has put the brakes on its empire, abruptly cutting off the wings of the Chinese company’s biggest star.

Today, to cautious applause from investors, the Alibaba e-commerce mogul takes his timid first steps on the world stage with a low-key trip to Europe where he cultivates like horticulture.

A far cry from the heyday of Ma’s statesman powers in 2017, when he traveled to New York to meet with President-elect Donald Trump for one-on-one talks in Trump Tower. days before the inauguration and promised to create a million American jobs.

The high-profile outing shocked the Chinese government, which first learned of the reunion and job promise with the rest of the world when Ma held an informal televised question-and-answer session with reporters in the lobby of the skyscraper. -sky, according to four people close to Alibaba with knowledge of the matter and a Beijing government source.

Alibaba’s government relations team was subsequently told by Chinese officials that Beijing was unhappy that Ma was meeting Trump without his prior approval, two people close to the company said.

Ma’s charitable foundation, which handles her media queries, did not respond to a request for comment.

The State Council’s Information Office and the Foreign Ministry did not respond to requests for comment. All sources declined to be named due to the sensitivity of the matter.

The January 9 meeting came at a time of heightened tension between the two countries after Trump criticized China during his election campaign, blaming it for the loss of American jobs.

A Trump spokesperson did not respond to a request for comment.

The four people close to Alibaba said they believed the meeting was a negative turning point in Ma-Beijing relations. They haven’t developed their thinking.

Investors are hungry for clues about Ma’s situation: The businessman’s mere sighting on the Spanish island of Mallorca last month, his first trip abroad in over a year, immediately took off. saw Alibaba earn up to $ 42 billion in value.

The story of his fall from official favor helps illustrate how quickly China has transformed under Xi Jinping, as he approaches what could be an unprecedented third term as economic powerhouse leader. and exerts increased control over some of its most innovative companies.

“A FIRST NATURAL TARGET”

Authorities cracked down on Ma’s business empire after he gave a speech in Shanghai in October last year, accusing financial authorities of stifling innovation. Regulators suspended the $ 37 billion listing of its financial technology company Ant Group two days before its scheduled Nov. 5 debut, ordered Ant’s restructuring, and launched antitrust investigations into Ma’s businesses, ultimately leading to a record fine of $ 2.75 billion for Alibaba in April.

The crackdown has spread across the private sector, with officials tightening oversight of companies across tech, real estate, gaming, education, cryptocurrency and finance.

“Since Jack seemed too provocative, out of step with Xi’s new approach to governance, he was a natural first target to signal that major change had begun,” said Duncan Clark, president of the consulting firm. Beijing-based investment BDA. China and author of a book on Alibaba and Ma.

“Jack regularly rubbed shoulders with foreign presidents, prime ministers, royalty, celebrities at places like Davos or on his own overseas visits. There was also a constant stream of VIP visitors to see him at. Hangzhou. “

Ma’s global reach did not end after Trump’s meeting, however.

Between 2018 and 2020, he spoke with many prominent personalities, including UN Secretary General António Guterres, Queen Rania of Jordan, veteran Malaysian politician Mahathir Mohamad and Belgian Prime Minister. of the time, Charles Michel, according to the Alibaba information portal Alizila and the media.

At Alibaba’s headquarters in Hangzhou, there is a building housing the company’s museum where Ma and her business partner Joe Tsai would take foreign visitors and show them around, according to another person close to Ma.

Tsai did not respond to a request for comment through Alibaba.

Ma had viewed meetings with foreign politicians as “unofficial diplomacy” for China, which he liked to do, the person added.

Alibaba told Reuters it has a guest reception center widely known as Pavilion 9 that offers a visual tour of its history and insight into its activities. It hosted a wide variety of guests in the exhibition hall at its headquarters, he added.

The company did not respond to further questions for this story.

‘LIKE YOU AND ME’

A sign of the evolution of the life of one of China’s most influential and successful businessmen, Ma requested an audience with at least two people from Xi’s inner circle in the weeks following the blockade. of Ant’s listing, but his requests were rejected by both, said two separate sources told by those people.

The billionaire subsequently wrote directly to Xi earlier this year offering to devote the rest of his life to rural education in China, according to a government source who said the president spoke about the letter during the visit. a meeting of the country’s top leaders in May.

Reuters could not determine whether Xi approved or responded to the offer, which was not previously reported, or precisely when Ma, a former English teacher, wrote the missive.

The South China Morning Post, owned by Alibaba, said last month that Ma was visiting Europe as part of a “study tour on agriculture and technology related to environmental issues,” citing a person. familiar with his route.

Last week, the newspaper published photos of Ma wearing a white protective dress and holding flower pots. He said he would continue to visit European companies and research institutes involved in agricultural infrastructure and plant breeding, citing people familiar with his plans.

Tsai, the Alibaba co-founder, downplayed his longtime business partner’s influence in a rare interview about the elusive billionaire with CNBC’s Squawk Box show in June.

“He’s keeping a low profile right now. I talk to him every day,” Tsai said. “The idea that Jack has this enormous amount of power, I think that’s not quite right,” he added.

“He’s like you and me, he’s a normal individual.”

(Reporting by Julie Zhu and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee, Paritosh Bansal and Pravin Char)

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