China's tech moguls have been walking on eggshells, Bloomberg reported. Alibaba Group Holding Limited (NYSE: BABA) founder and the nation's most prominent entrepreneur Jack Ma disappeared from public view after delivering a speech on China's state-dominated banking sector just over two years ago.
His blunt criticism outraged President Xi Jinping.
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Beijing abruptly pulled the $35 billion IPO of Ma's fintech giant Ant Group days after that infamous speech. The following spring, Beijing slapped Alibaba with a $2.8 billion anti-trust penalty. Ma's investment firm struggled to raise money because investors feared political repercussions.
Two years of a regulatory crackdown, endless Covid-Zero lockdowns, and confusing party slogans have strained China's entrepreneurial spirit when Xi needs it the most.
China now has a human capital crisis. Although Xi struggled to explain that the government wanted a more significant economic pie for everyone, he failed to convince most.
Aspiring entrepreneurs see the slogan as an excuse to take away their wealth as soon as their startups become successful.
As an integral part of his new economic development model, Xi is keen to attract and foster scientists and engineers who can help the nation advance in industrial technologies.
But the Biden administration is equally eager to halt China's progress, recently deciding to restrict "U.S. persons" from supporting the development or production of chips at some Chinese firms.
In late 2021, amid the tech crackdown, more than 2.1 million registered for the national civil service exam, competing for just over 31,000 jobs. That is about a one-third increase from a year earlier. This year's figure will likely be higher.
Consumer tech, for one, has done tremendous good for society. Alibaba's escrow payment system taught the Chinese to trust online transactions. E-commerce Pinduoduo Inc's (NASDAQ: PDD) agriculture program shortened the food-supply chain.
This week's World Internet Conference is a golden opportunity to bring Ma, who embodies China's entrepreneurial spirit, back into the fold.
Last year, senior executives from Alibaba to Xiaomi Corp (OTC: XIACF) (OTC: XIACY) pledged support for Xi's "common prosperity" drive, vowing to boost small businesses on their platforms.
Price Action: BABA shares traded lower by 1.89% at $68.38 premarket on the last check Tuesday.
