Jack Ma, the co-founder and chairman of Alibaba Group, the Chinese conglomerate with a presence in diverse sectors, including internet, e-commerce, and retail, is one of the symbols of Chinese economic success. Indeed, Ma was named China’s richest man by Forbes magazine and also numbers 20th on the list of the world’s richest people. Alibaba Group is ranked number 300 on the global ranking of Fortune 500. However, on 26 November 2018, Jack Ma, was revealed to be a member of the Chinese Communist Party. This information was brought to light by a newspaper of the Chinese Communist Party, which identified Ma as being among a group of people deserving of reforming and opening China.
Given Ma’s wealth, as well as the prestige and powerful stature of his company, the news of his party membership was certainly met with fanfare. Until now, big names of the Chinese business world like Ma were seen as individuals who steer away from the arena of Chinese politics. However, Ma’s membership in the Communist Party is just a minor episode that is illustrative of a much wider process – that is, since assuming power in 2012, Chinese President Xi Jinping has been concentrating power and tightening control over Chinese society.
The exact causes for this political transformation are difficult to identify. When Xi assumed power in 2012, he assumed leadership over a country that had experienced over three decades of dynamic economic growth. However, he also inherited rampant corruption that spreads among high-ranking members of his Communist Party, as well as in public administration and state-owned enterprises. When Xi assumed power in 2012, a major driver of his ascent was the promise to tackle corruption. Xi has been successful in this regard, if one looks at his record. By 2018, according to the Chinese Communist Party, 1.3 million party officials and members were caught in acts of corruption since Xi started his anti-corruption campaign. In order to combat corruption among highly powerful people within a deeply anti-democratic state, Xi evidently had to concentrate more political power in his hands.
The Chinese economic slowdown has also played a role in Xi’s centralization of power. For the past 40 years, the Chinese Communist Party feared social and political upheaval, and as such, relied on economic growth as the source of its domestic legitimacy. However, there is fear of losing this legitimacy given the gradual slowdown in the Chinese economy. This is especially the case taking into account the fact that China now has the world’s largest middle class, which will demand more of its government in terms of quality of life. Thus, given the complex Chinese social, economic, and demographic landscape, more centralization of power was needed in case domestic stability deteriorated.
While it is impossible to determine whether the change was intended or unintended, it can nevertheless be seen that, as a result of these circumstances, Chinese politics became more personalized and recognizable owing to the power of one man--President Xi. In more recent political history, the Chinese president was traditionally someone who acted on behalf of the collective political body -- that is, the Communist Party -- rather than as a conspicuous power wielder. This is a major change compared to the dominant theme of Chinese domestic politics in the period between 1989 and 2012, which put an emphasis on more impersonal meritocratic and technocratic Chinese Communist Party rule. The dominance of one person in Chinese domestic politics has not been recorded in its current form and intensity since the rule of Deng Xiaoping (1978-1989).
Indeed, the level of Xi’s political power more closely resembles that of the totalitarian days of Mao Zedong (1949-1976). In March 2018, the Chinese Communist Party removed the two-term limit for the Chinese presidency, giving Xi the opportunity to maintain power for his lifetime, just as Mao did. Equally important, the Party decided to inscribe Xi’s name in the constitution, which had only occurred earlier with Mao. Xi has also been increasing his control over the Chinese People’s Liberation Army, in this way showing that he controls one of the world’s most formidable fighting forces. Under Xi, the Chinese national security apparatus has significantly increased its surveillance capabilities through the use of modern technology, using it against both its citizens and internationally. China, under Xi, has also implemented a heavy and comprehensive crackdown on the Uighurs, the Muslim minority in its western Xinjiang region, as they are perceived as the greatest potential separatist threat in the country.
China’s largest companies and entrepreneurs have not been safe from Xi’s tightening grip. Any legal entity based in China that has more than three party members is obligated to set up an internal party cell, ensuring Xi’s and the Party’s dominance. According to Chinese sources, some three-quarters of private enterprises in China, numbering approximately 1.9 million, complied with this requirement in 2017. Tech companies like Alibaba Group are under constant pressure by Xi and the Party to help the state, as well as increase its technological, communications, logistical, and even surveillance capabilities. Under pressure from state regulatory agencies, Chinese conglomerate HNA Group Co. was forced to sell its foreign assets, including shares at Deutsche Bank. The Chinese conglomerate Wanda Group, led by wealthy entrepreneur Wang Jianlin, has also started to sell its foreign assets after pressure and a crackdown by the government in order to force businesses to lower their debts. The Confucius Institute has also faced greater scrutiny by Xi, who demands that the institute be used to promote Chinese values and ideology globally.
Foreign companies have also felt the reach of Xi and the Communist Party as they have been forced to open internal party units and cells, giving the Party a final say over their China-based operations, even though these firms are privately owned. Moreover, many foreign companies are punished by Xi and the Party when they go up against Chinese foreign policy goals. Hotel operator Marriott was denied access to the internet in China until it formally apologized for the fact that Taiwan was listed as a country on its website. The Chinese government also closed China-based supermarkets owned by the South Korean Lotte Corporation, as the latter had sold its land in South Korea to be used for stationing the US-supplied THAAD anti-missile system. In 2016, China arrested the management of the Macau-based unit of Crown Resorts, Australia’s gambling group, on charges of promoting gambling in foreign locations. Namely, Crown Resorts management was trying to bring Chinese gamblers to their Australia-based casinos, which led to the ire of the Chinese government, which has been trying to prevent capital flight as the Chinese yuan has weakened against the US dollar.
Taking these matters into account, it is becoming evident that, under Xi, the Chinese Communist Party and the Chinese state are no longer the same. Under the leadership of Xi, the two have abandoned the old ways of politics, where they tended to keep a low profile and left Chinese society, as well as foreign and domestic companies, alone as long as they did not endanger the political monopoly of the Chinese Communist Party. Under Xi’s leadership, the Chinese Communist Party has demonstrated its political superiority and ability to punish anyone who is against the prevailing political agenda. China is under the leadership of a man whose grip on the levers of power is getting stronger by the day. That grip extends to every pocket of Chinese society, from which no individual can escape -- even if you are Jack Ma.