News Analysis |
People’s Daily, a magazine of China’s ruling party, in its latest edition has acknowledged the fact that Chinese billionaire, the founder of Ali Baba and Ali Express, Jack Ma is, in fact, a member of the party as well. The article praised the services of the capitalist businessman toward the development of China and especially pushing forward the Belt and Road Initiative, the trademark of Chinese President Xi Jinping’s era.
While the news itself is not something to be astounded by, but the fact that Jack Ma himself had once proclaimed to stay away from politics has made it an unanticipated development. “My philosophy is to be in love with the government, but never marry them,” he said at the World Economic Forum in Davos in 2007.
These private firms not only provide valuable insight to the government for its economic plans for technological expansion but have been known to funnel their hard earned money into the government initiatives as well.
But party members must hold up their right fist and recite an oath upon joining. “Be loyal to the party, work actively, fight for communism all one’s life, always be prepared to sacrifice everything for the party and people, and never betray the party,” they recite.
Key of the Business – Join the Ruling Party
A country which is governed by the single-party rule, joining the politics simply means becoming a member of the Communist Party of China. Jack Ma is not the first billionaire to be revealed as part of the ruling party, but several other Chinese businessmen such as Wang Jianlin the founder of Dalian Wanda Group which is predominantly a construction giant and world’s largest movie theatre operator is also a member of Communist Party.
China has a relatively complex economic system after it was remodeled in the 1980s, moving from textbook communism to an amalgam of capitalism and socialism. The new model focuses on “The People” rather the growth of the individual entrepreneurs becoming multibillionaires. Though private ownership and businesses are allowed they are under state control eventually.
Even the banks work as per the discretion of the Chinese government, unlike rest of the world or especially in the west, where they choose when to lend and when to hold back on credit based on their own economic interest. China’s 150 or so large state-owned enterprises report directly to the central government while choosing their own CEO’s and keeping their profits. But if they get into financial trouble, the state bails them out.
A country which is governed by the single-party rule, joining the politics simply means becoming a member of the Communist Party of China.
In such an economic environment, becoming the part of the ruling elite works both ways. For the entrepreneur, it’s helping to grow its business multiple folds and for the state, the profits are eventually recycled back to be spent as per the state’s needs.
Bi-directional Flow of Cash
In China, the incentive for private sector firms to comply and align themselves with the government’s thinking pattern is several economic waivers and compensations. It is primarily the reason why that now the CEOs of tech companies like Tencent, Pony Ma has joined as a member of the Chinese parliament.
These private firms not only provide valuable insight to the government for its economic plans for technological expansion but have been known to funnel their hard earned money into the government initiatives as well. For example, In December 2017, Jack Ma announced that the company had started a $1.5 billion poverty relief fund.
At a news conference before this year’s legislative session, Pony Ma, Tencent’s chief executive and a returning member of the Congress, offered suggestions for improving schools and health care.
China has a strict policy when it comes to its citizens and what they owe to the state. Multi-billionaires, including the celebrities, can go missing for months to re-emerge only to apologize for the embezzlement or another form of corruption, after paying the massive fine of course. This is how it works in China.