On May 3d, for almost half a day, people thought Jack Ma, the founder of China's e-commerce giant Alibaba, had been arrested by Chinese police.
As we know, Mr. Ma has stayed largely out of public view since Beijing cracked down on his companies in late 2020. Was it the end of one of the richest men in Asia?
How it all began: a Man “Named Ma” has Been Arrested
On Tuesday morning, Chinese state-media CCTV reported that police in the city of Hangzhou, where e-commerce beaumont is headquartered, had been investigating a person with the surname Ma since April 25.
And after weeks, the Hangzhou-based Security Bureau decided to arrest. No details were given. Many Chinese netizens assumed that the person in question was Jack Ma. As stated by Bloomberg, after the news broke, Alibaba's share price in Hong Kong slid 9.4% in early trading, wiping about $26 billion from its market value.
A turmoil that affected all Chinese BigTech listed in Hong Kong with the tsunami that even touched the Japanese stock-market in Tokyo.
Such big Misunderstanding
The news was spread around the globe and achieved first pages almost everywhere. But a few hours later, Global Times published a report citing unnamed sources that said the individual in question actually was identified as a director of hardware research and development at an IT company, was born in 1985 - making him almost 20 years younger than Alibaba's founder - and, last but not least, had three characters in his name.
For everyone who ignores that, Jack Ma's Chinese name is Ma Yun, with only two hanzi. That was the detail everybody was waiting for. Jack Ma is saved.
The anxiety of Chinese Tech Sector
As pointed out by Steven Leung, executive director at UOB Kay Hian, the episode highlights just how anxious investors remain in the once-mighty tech sector after Beijing’s yearlong clampdown on nearly every corner of the internet sphere.
Moreover, Tuesday's fluctuation in stocks stands in contrast to the stunning gains recorded last week, including a 10% surge in Hong Kong’s tech gauge, as traders cheered the Politburo’s vows of support for the economy and platform firms.
Russia, Sanctions and Covid-19. The Challenges for Chinese Economy
China’s first quarter economic growth data is expected to reflect pressure from widespread Covid-19 restrictions. Beijing signaled it will provide more stimulus to boost the economy and such decision was well welcomed by investors, but according to Kevin Yao, a Reuters analysts, China's policymakers are struggling to find ways to ward off an economic slowdown that threatens job losses in a politically sensitive year, as COVID-19 lockdowns disrupt supply chains and jolt businesses.
The future is uncertain, and not only for the various lockdowns in the country or Covid-19. At the end of April, Chinese regulators held an emergency meeting with domestic and foreign banks to discuss how they could protect the country’s overseas assets from US-led sanctions similar to those imposed on Russia for its invasion of Ukraine.
Chinese are concerned that the Biden administration could strengthen economic ties against Beijing or, in the worst scenario, the same measures taken against Moscow could also be applied to China.
However, the Financial Times doubted whether Washington could ever afford to cut economic ties with China given its status as the world’s second-largest economy, huge holdings of dollar assets and close trade relationship with the US. But at this point, everything is possible.
Xi Jinping vs BigTech, it’s time to Bury the Hatchet
Beijing needs its tech champions to boost the economy. Facing unknown challenges and internal political struggles after Shanghai turmoil, President Xi Jinping came back to walk on a less “revolutionary” path. It’s time to bury the hatchet: Beijing is ready to mollify tech bosses as COVID-19 threatens the economy.
Chinese authorities are asking its companies to invest at home, and they are ready to hold a symposium with a number of internet companies, in particular those which have been battered by last year's crackdown on the so-called "platform economy".
President Xi Jinping is expected to attend and chair the meeting. Even with such positive vibes, the knee-jerk selling earlier on Tuesday came despite Beijing’s repeated promises to take a softer stance on tech firms. So, what’s next?
