Nature of Government-Business Relations in China

Politics and Business In Post - Jack Ma
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Table of Contents Introduction. 3 Background story; The Rise of Jack Ma. 3 Jack Ma's Government Relations. 4 Challenges and Growth of Alibaba. 5 Lobbying in Alibaba's Business Strategy. 6 The Dual Roles of Jack Ma: Navigating Entrepreneurship and Politics. 7 Entrepreneurial Comparisons of Jack Ma. 8 Implications and Takeaways. 9 Conclusion. 9 References. 10
Introduction
Jack Ma, the widely acknowledged entrepreneurial force behind Alibaba, embodies the complex dynamics of business innovation and politics navigating in China. Ma's journey from his modest Hangzhou beginnings shows his business acumen and skill at navigating China's political minefield. This case explores the subtleties of how Ma's connections to the Communist Party and the larger Chinese government have influenced and guided his extensive business endeavours.
Background Story: The Rise of Jack Ma
Ma Yun, also known as Jack Ma, was born in the city of China, Hangzhou and experienced many hardships and rejections in his early years. Eager to perfect his English, Young Ma gave tours to foreign visitors to Hangzhou and was promptly dubbed "Jack" by one of them. He initially experienced academic setbacks, failing two times the university entrance exams, but eventually got into Hangzhou Teachers College (Reuters, 2018). He graduated in 1988 due to his perseverance, which later inspired him to pursue an MBA at the Cheung Kong Graduate School of Business.
Jack started out teaching English in 1988 after finishing his education. He nevertheless used his entrepreneurial spirit to launch the Haibo Translation Agency in 1994 and China Pages, a ground-breaking online directory for Chinese businesses, in 1995. However, his vision was genuinely revolutionary with the co-founding of Alibaba Group in 1999, which transformed e-commerce and internet technologies globally, not just in China (Yun et al., 2020). Consequently, Taobao, an online shopping platform, and Alipay, a ground-breaking online payment system, were introduced under Ma's inspiring leadership, expanding Alibaba's product offering. His entrepreneurial prowess did not end there; in 2010, he co-founded the venture capital firm Yunfeng, making his entry into the world of investments. Alibaba's current CEO, Yong Zhang (Daniel Zhang), took over from Jack Ma in 2018, but Ma remained heavily involved as executive chairman until his retirement in 2019.
Moreover, Ma faced some difficulties on her journey. He expressed admiration and disapproval for his support of the strict "996" work ethic. According to McKnight, Kenney, and Breznitz (2023), the suspension of his fintech company's eagerly awaited IPO, Ant Group, was caused by his public criticism of China's financial regulatory system in October 2020, which attracted increased scrutiny from the authorities. During this period, Ma's public appearances decreased due to China's regulatory crackdown on technology giants. However, the Personal interests of Jack Ma, a husband to Zhang Ying and a father of two, range from reading and writing kung fu fiction to engaging in tai chi and meditation. Ma's life embodies a blend of business savvy and individual passions—he owns a vineyard in France and campaigns for environmental preservation. His career path, which both extraordinary success and formidable obstacles have characterized, is evidence of his tenacity, creativity, and unwavering entrepreneurial spirit.
Jack Ma's Government Relations
The affiliations of Alibaba's eminent leader, Jack Ma, with Chinese government organisations have come to light recently. Ma is a member of the Communist Party, according to a revelation made by the People's Daily, the party's official newspaper (Pieke, 2022). This information dispelled preconceived notions about Ma's political neutrality, as many people thought he was not affiliated with any party. To emphasise Jack Ma's centrality to China's "reform and opening up" process, the People's Daily list also highlighted notable figures like Baidu head Robin Li and Tencent's Pony Ma (Yueyu et al., 2023). However, these connections occasionally present advantageous chances, particularly for well-known Chinese businesspeople. Affiliations with the Communist Party have historically been viewed by many as a positive, even beneficial, career choice comparable to joining a Western business club. While Alibaba's meteoric rise can be attributed to the company's innovative business model and Ma's leadership, being politically aligned may have helped the company more easily navigate China's complex regulatory landscape. In addition, the G20 Hangzhou Summit Gazette included Alibaba's proposal for the electronic world trade platform (eWTP), similar to China's "One Belt, One Road" strategy, demonstrating the complementary nature of Alibaba's goals and China's international economic strategies.
Alibaba has substantially invested in poverty alleviation and technological advancements to integrate its mission with the government further. Alibaba's support for China's drive for technical supremacy is evident in its establishment of the Alibaba DAMO Academy and its dedication to exploring fundamental technological advances. The available information fails to  Jack Ma's specific involvement with organisations such as the People's Congress or the People's Political Consultative Conference. However, his membership in the Communist Party and Alibaba's support for national initiatives highlight China's complex interplay between business and politics. Despite being contentious to some, these connections undoubtedly helped Alibaba succeed in navigating the challenging Chinese business environment.
Challenges and Growth of Alibaba
Alibaba's meteoric rise since its inception has made it an undisputed titan of the online retail industry. Established in 1998, the company initially disrupted market dynamics by offering complimentary data to suppliers from 1998 to 2001 (Schmuck & Benke, 2020). Alibaba's later move, which introduced platforms like Taobao and Alipay, foreshadowed its earlier strategy. Taobao's free service model, implemented for three years, effectively challenged eBay's fee-based approach in China, even though eBay had a strong presence through EachNet. Diversification was a significant obstacle for Alibaba. In order to take on China's market leader, Meituan, they bought the food delivery app Ele.Me in 2018. Zhang (2023) highlighted that Meituan maintained its dominant position in the market with a 67.3% share of transaction value, while Ele.Me lagged with a 26.9% share. Alibaba has launched its cloud services, following a similar model to Amazon's AWS. By 2021, despite becoming the fourth-largest cloud provider globally, this segment accounted for a mere 10.9% of its revenues and continued to operate at a loss. Weakened consumer demand, made worse by uncertainty in China's real estate market and strict pandemic policies, added to these difficulties.
Accordingly, Alibaba used customer-focused strategies, creative marketing, and adaptability to overcome these obstacles (Berning, 2021). The company's marketing campaigns were always cutting edge because they combined the 4Ps (Product, Place, Promotion, and Pricing) with the STP (Segmentation, Targeting, and Positioning) strategy. The Consumer-to-Business model, which emphasises group buying power, and the Offline-to-Offline strategy demonstrated Alibaba's flexibility in responding to market changes. Business and politics in China are deeply intertwined, as evidenced by Jack Ma's Communist Party membership becoming public knowledge. Compared to joining...