People fear fame like pigs fear growing fat.
– Chinese saying
Most countries have a list of the wealthiest people and it is considered as an honour to feature on the list.
In China, these lists have a colloquial name: sha zhu bang: “kill pigs list.”
In the last fifteen years, China has produced greater overall wealth than any other country. The number of its billionaires has gone from a mere 15 to around 250 in just six years.
But for a number of these people this elevated status is short-lived. Majority of those on the list end up in the court or the jail. Some even get executed.
Regulatory Realignment
Over the last year, China has seen a struggle between state regulators and entrepreneurs as the government tries to bring technology companies increasingly in line with the strategic goals of the Chinese Communist Party.
China’s regulators need to discipline their country’s tech companies goes beyond normal concerns to a broader sense, that the companies’ interests aren’t sufficiently lined up with the Chinese Communist Party’s industrial policy or its goal of achieving technological self-sufficiency.
The campaign has continued apace in 2021 with an intensifying series of antitrust crackdowns and data security probes into the major tech firms (by fining for anti-monopoly violations, penalising for price dumping, and app dumping from app stores etc.)
XI’s Directives
- Xi has made it clear what he expects from tech executives. A 2017 directive called for measures to “strengthen the sense of loyalty” among entrepreneurs and to strengthen the authority of the party leadership over them.
- In July 2020, Xi told entrepreneurs that they should emulate “patriotic entrepreneurs” from Chinese history.
- Another set of directives released in September 2020 said that “ideological guidance” should be strengthened to “create a core group of private sector leaders who can be relied upon during critical times.”
- Most recently, Xi presided over a meeting of the Communist Party’s Central Committee for Financial and Economic Affairs at which officials outlined plans to adjust excessive income and “encourage high-income groups and enterprises to give back to society more.”
Voices of dissent
Alibaba founder Jack Ma gave a speech last October harshly criticizing China’s regulatory system. His speech was like a punch on the face.”
Ma told the assembled members of China’s financial, regulatory, and political establishment that the regulatory system was stifling innovation and needed to be reformed to fuel growth.
“Chinese banks, operate with a pawnshop mentality”
“To innovate without risks is to kill innovation,”
“There’s no innovation without risks in the world.”
– Jack Ma
In giving the speech, Ma took a big risk for himself. His words were a clear signal to regulators that tech companies would fiercely resist any imposition of red tape on them, no matter how reasonable.
The speech reportedly infuriated the leadership in Beijing and prompted Xi to take drastic actions.
Towing the line: Pre-emptive Philanthropy
The tech executives have seen the writing on the wall. Now some of China’s richest entrepreneurs have embraced philanthropy in a bid to stave off unwelcome government attention.
One day after Xi emphasized the virtue of philanthropy, tech conglomerates and China’s rich are pledging billions of yuan towards common prosperity, social, environmental, education and science initiatives.
The sudden outburst of philanthropic activity is part of an effort to court public opinion and polish their reputations before they find themselves in deep trouble.
Some chief executives have even decided to move completely out of the limelight by stepping down from their positions at the top of their companies.
Is it Weeding out Corruption?
Arrests and prosecutions like these make one believe that China has begun to take corruption more seriously. However, arbitrary and selective targeting points otherwise.
China’s legal culture thrives on the principle of ‘killing the chicken to scare the monkeys.’ If the Chinese authorities want they can probably find grounds for accusing any one of them for bending or breaking the rules.
Is it to Crush the Perceived Potential Competition?
China’s billionaires and tech giants are seen as potential rival centers of power and influence in the country.
The party and the party president feels if not put in place, they can emerge as alternative powers.
Your views and value additions are most welcome
For regular updates, please register here
References
https://www.theatlantic.com/international/archive/2013/01/why-do-chinese-billionaires-keep-ending-up-in-prison/272633/
https://warontherocks.com/2021/08/china-takes-on-its-tech-leaders