THE most recognisable face of Chinese capitalism belongs to Jack Ma, the founder of Alibaba, an e-commerce juggernaut matched in size only by Amazon. Mr Ma, who launched Alibaba from a small apartment in Hangzhou in 1999, is an emblem of China’s extraordinary economic transformation. This week’s announcement that he will step down as the firm’s chairman a year from now, to concentrate on philanthropy, was greeted with comparative calm by investors. He stopped being chief executive in 2013; Alibaba’s share price has more than doubled since its initial public offering, the world’s largest-ever, in 2014 (see article). But one question presents itself: could China produce another story to match his? The answer is almost certainly not.
There are some very good reasons for that. China’s own rise is an unrepeatable one. When Mr Ma, then an English-language teacher, launched Alibaba, the country was still gearing up to join the World Trade Organisation. Its GDP per head, in terms of purchasing-power parity, stood at under $3,000; it is now more than six times higher. The internet was still young, too. Less than 1% of Chinese had access to the web back then, compared with some 36% of Americans. As incomes grew and connections proliferated, Mr Ma took full advantage.
Thousands of small businesses have since flourished on Alibaba’s platforms. About 1m merchants trade in its virtual emporiums. Its services have helped push China’s economy towards consumption-led growth. Last year it boasted sales of $25bn on Singles’ Day, China’s equivalent of Black Friday (when Americans spent a measly $5bn). It has transformed logistics and finance, as well as retailing. Last year Alibaba delivered an average of 55m packages a day; its financial offshoot, Ant Financial, accounts for more than half of China’s vast mobile-payments market. Its reach is so great that many startups decide to work with Alibaba rather than strike out alone.
But more has changed than the structure of China’s economy and the clout of digital giants like Alibaba. Politics has changed, too. Alibaba thrived partly thanks to Mr Ma’s skilful dealings with China’s ruling Communist Party, with which he cultivated both closeness and stand-offishness (“Love them, don’t marry them,” he once said of the government). Under the leadership of President Xi Jinping, however, China’s political system has grown hostile to private businesses that become too big or too disruptive. Officials have constrained bosses’ freedom to make splashy deals. Bytedance, a brash technology firm set up in 2012, has been reined in, and forced to withdraw one of its apps. Its founder issued a grovelling public apology after being chastised by the government. Ant, meanwhile, has seen its aspirations to compete with state-owned banks held back by regulators (see article).
China is putting its corporate champions at the service of its ambitions to compete globally in high-tech industries. Alibaba’s task is to use artificial intelligence to improve cities. Through state-backed venture-capital funds, the government is pouring money into industries that were once the preserve of the private sector. Rumours occasionally surface that it plans to take stakes and board seats in big tech firms. All this has fed growing international suspicion of China, especially in America. Mr Ma was one of the first out of the blocks to congratulate President Donald Trump on his election victory; this year America prevented Ant’s purchase of MoneyGram, a money-transfer firm, on national-security grounds. The reality was always more complicated, but Mr Ma embodies an idea of China as market-driven and open. That idea has faded.
Jack be nimble
None of this is to say that enterprise is fizzling in China. Indeed one of Mr Ma’s legacies is a shift to a culture that values startups more than ever. His charisma and folksy advice have earned him cult-like status among the country’s entrepreneurs. Venture capitalists are lavishing money on hundreds of newcomers, in industries from biotech to electric vehicles. Small private firms will continue to flourish.
But it is harder to be as disruptive today as Mr Ma was 20 years ago. That is partly because his own creation is so dominant. Increasingly, however, the greatest obstacle to disruption is China’s rulers. The party is intent on having a say much earlier in the development of industries that it considers important. As a result, China is unlikely to see new business leaders with the boldness and brio to match Mr Ma.