Ant Group completed the process of removing founder Jack Ma’s control in early 2023. Recently, this news resurfaced and sparked hot discussions. Analysts believe this situation may be related to power struggles within the Chinese Communist Party (CCP) at the Beidaihe Conference. Jack Ma being forced to relinquish control of his founded company is seen as a microcosm of the fate of private entrepreneurs under the CCP’s rule.
In the past, Ant Group revealed in January 2023 that founder Jack Ma voluntarily gave up control rights. The People’s Bank of China announced in December 2023 that Ant Group’s subsidiary, Alipay (China) Network Technology, received approval to change to having no actual controller, signaling the completion of the procedures for Jack Ma to relinquish control rights.
The news of Jack Ma voluntarily giving up control rights of Ant Group has continued to attract attention. The latest discussions coincide with the Beidaihe Conference, indicating possible involvement in power struggles within different factions of the CCP. The news remains ambiguous in whose favor it is, but it has once again brought Xi Jinping’s “state advances, private retreats” policy under scrutiny.
Ant Group originated from the third-party payment platform Alipay on the e-commerce website Taobao. In 2014, Alibaba Group separated its financial business to establish Ant Group, which was officially renamed in June 2020.
After the separation from Alibaba, Jack Ma remained the actual controller of Ant Group. However, through various agreements, Jack Ma controlled Hangzhou Junhan and Hangzhou Junao, two partnership enterprises that collectively held a 53.46% stake in Ant Group.
In October 2020, Jack Ma criticized banks for their “pawnshop mentality” at a financial summit in Shanghai. Shortly after, Ant Group’s plans for a $37 billion IPO were halted. In April 2021, Alibaba was fined around $2.75 billion for alleged market monopolization.
Ant Group was required to restructure its business, divesting from Alibaba’s equity and management ties, and shutting down certain consumer credit products. Top management collectively exited Alibaba’s partner team, completely severing ties with the company. Ant Group also had to introduce state-backed shareholders by the end of 2022.
In January 2023, Ant Group announced a major equity adjustment plan, significantly reducing Jack Ma’s voting rights from 53.46% to 6.208%. This marked the end of Jack Ma’s era as the actual controller of Ant Group.
While rumors circulate about Ant Group reapplying for an IPO after its “restructuring,” no further updates have been made public yet. Notably, on August 11 this year, Ant Group and China Rare Earth Group both debunked rumors about a joint venture to create a stablecoin.
The five-year transformation involving Jack Ma, Ant Group, and Alibaba has become a typical event of Xi Jinping’s promotion of “state advancement and private retreat.” This process has been described as a new form of “public-private partnership.”
In his speeches as early as 2006, Jack Ma mentioned the possibility of handing over Alipay to the authorities. In 2013, he emphasized the pressure he faced, indicating a willingness to hand over Alipay if required.
Dr. Xie Peixue, Deputy Researcher at the Taiwan Institute of National Defense and Security Studies, stated that these were inevitable choices made by Ant Group to survive, as Jack Ma was compelled to relinquish control rights.
Dr. Xie highlighted that the CCP seeks absolute authority over national will and regulatory power, requiring every commercial entity, regardless of size or innovation capabilities, to serve political power. As a result, the future of entrepreneurs does not look promising.
In February this year, Xi Jinping convened a meeting with private entrepreneurs in an attempt to boost the economy. Although Jack Ma attended the meeting, he appeared to be marginalized.
Financial commentator Xiao Yi expressed that Jack Ma’s journey from the inception of Alibaba to the peak of Ant Group, and now relinquishing control rights, illustrates the changes in China’s business environment and political landscape over the past decade. It clearly demonstrates the CCP’s desire to control everything, with Jack Ma’s fate becoming a microcosm of private entrepreneurs.
Xiao Yi believes that the crackdown on Jack Ma fundamentally stems from political power struggles within the CCP. Jack Ma had established various institutions, such as Hupan University, gathering top entrepreneurs, which some compare to the East Lin Party of the Ming Dynasty, raising suspicions of political motives.