LDN - Business

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

[March 27, 2023] By Julie Zhu, Kane Wu and Kevin Huang

HONG KONG/BEIJING (Reuters) - Alibaba founder Jack Ma has returned to China, ending a stay overseas of more than a year that industry viewed as reflecting the sober mood of its private businesses, and which sources said eventually spurred the new premier to reach out.

The return of China's best-known entrepreneur may help to quell the concerns of its private sector after a bruising two-year regulatory crackdown.

Ma's re-emergence in public offers 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-19 curbs.

Online talk of Ma's return began emerging on Chinese social media early on Monday, before being confirmed by a school he had visited and the newspaper, the South China Morning Post, which is owned by Alibaba.

During his visit, 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, 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 eastern home city of Hangzhou in 2017.

Ma 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.

China's new premier, Li Qiang, a close ally of President Xi Jinping, had recognised Ma's return to the mainland could help boost business confidence among entrepreneurs and since late last year had begun asking Ma to return, 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 China's State Council, or cabinet, did not immediately respond to a request for comment.

'ALREADY BEATEN'

Ma's stay abroad came to symbolise a reversal of fortunes for China's private sector after his empire and the technology industry were the targets of Beijing's regulatory crackdown.

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Alibaba founder Jack Ma visits Hangzhou Yungu School in Hangzhou, Zhejiang province, China in this handout picture released on March 27, 2023. Hangzhou Yungu School/Handout via REUTERS

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 withdrawal from public activity.

In late 2021 he left mainland China and has been seen in photographs in Japan, Spain, Australia and Thailand.

Ma's return "boosts the sentiment of the broader platform and 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."

Zhang added, "The previous restrictive policies on the platform and internet sector are also expected to be adjusted."

Alibaba shares jumped more than 4% after news of Ma's return, before giving up some of the gains.

Li has been at the forefront of government's effort to bolster the private sector, saying this month that China's environment for entrepreneurial businesses would 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 ushered in by the crackdown.

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 it's not coming back."

(Reporting by Julie Zhu, Kane Wu, Kevin Huang and Xu Jing; Additional reporting by David Kirton, Josh Horwitz and the Beijing Newsroom; Writing by Brenda Goh; Editing by Christian Schmollinger and Clarence Fernandez)

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