Chinese businessman Jack Ma, one of the richest men in China, has a net worth of nearly $60 billion. Xi Jinping, the general secretary of the Chinese Communist Party, officially earns just over $1,700 a month.
But make no mistake about which one of these men has more power. On Nov. 3, the Shanghai Stock Exchange announced the suspension of Ant Group’s plans to put its stock on sale in what was set to be the world’s largest initial public offering (IPO). In the lead-up to the listing, global investors had valued Ma’s mobile payment service Ant Group at over $310 billion — more than ICBC, China’s largest state-owned bank, and roughly the same as JP Morgan. The Party had decided to show who’s boss.
We can’t know for sure precisely why the Party decided to put Ma, co-founder of the tech giant Alibaba, in his place; we can only parse the clues. For a Chinese businessman, Ma is notoriously brash. Many market-watchers noted that Ma had publicly attacked government regulators a few weeks before the planned IPO — the most recent in a series of remarks that might have raised his public profile a bit too high for the Party’s liking. Some observers have speculated that the suspension is intended to be a multibillion-dollar fine. Others have wondered whether it’s the acceleration of a process that could lead to his arrest. Ma himself hasn’t made a public announcement in more than a week.
The question we should really be asking, though, is this: Why do American investors downplay the centrality of the Party in China’s increasingly globalized financial markets? When they speak publicly about China’s economy, many of the big names in American finance pretend that the Party merely hovers in the background, like a benevolent and invisible hand. Two weeks before the IPO implosion, Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, managed to effuse about the strength of China and the Chinese system in a Financial Times op-ed — without once mentioning the Party. He referred to “state capitalism,” “communism” and “Beijing,” but not the Party, the organization that has control over everything that happens in the country.
Many of his peers share this strange syndrome of Party blindness. Throughout the Trump administration, Stephen Schwarzman, chief executive of private equity giant Blackstone, has served as a bridge between Trump and Xi. In 2019, he published an autobiography, “What It Takes,” in which he spends more than a dozen pages addressing his relationship with Party officials. Aside from that, his only mentions of the Party reference retired Chinese leaders — implying that it’s a thing of the past. The dominant institution in China doesn’t even warrant a mention in the index.
Oftentimes, when financiers leave the private sector, they become more critical. For Stephen Roach, the former chairman of Morgan Stanley Asia who’s now at Yale University, it’s the reverse. His most recent column, titled “China leads again,” was published in late October. It commends China for leading the global economic recovery — again, without mentioning the Party. In more than a dozen columns he has written on China in the past two years for the opinion site Project Syndicate, Roach mentions the Party in just two articles — in both cases, almost incidentally.
Chinese CEOs are more craven. They often remind listeners that they flourish “under the leadership of the Party.” Ma himself frequently praises Xi’s guidance, but considering how the Party treats outspoken businesspeople such as real estate tycoon Ren Zhiqiang, who’s now serving an 18-year sentence for graft after calling Xi a “clown,” it’s hard to blame him.
In every realm, we speak differently in public than we do in private. Perhaps Dalio, Roach and their peers understand the centrality of the Party, and its relevance to the articles they write and the interviews they give. Indeed, the Party appreciates when foreigners downplay its power to global audiences. It normalizes China’s Leninist political system. But if that’s the motivation of the investors’ behavior, their omissions stem from obfuscation rather than naivete.
The issue is not that the Party doesn’t deserve credit for China’s advances. One can compellingly argue that the Party has done wonderful things for China, and that a strong, Party-led China is the only thing that could rejuvenate the great Chinese nation. Or one can believe, as I do, that the radical evolution — or destruction — of the Party is better for both China and the world.
Both sides can be debated. But either way, the Party cannot be ignored.
In September 2019, financial news service tycoon Michael Bloomberg incited scorn in the United States for claiming Xi is not a dictator. But also, while praising Xi for fighting climate change, he said that “the Communist Party wants to stay in power in China, and they listen to the public.” This is true: Bloomberg’s comments are more intellectually honest than those of many of his contemporaries. Pretending that the Party doesn’t loom over major financial decisions in China is specious at best.
Ma understands that. Even Bloomberg understands that. Let’s hope more Americans — and especially American business leaders — soon catch on.
Isaac Stone Fish is a journalist and a contributing columnist for Global Opinions. He is also a senior fellow at the Asia Society’s Center on U.S.-China Relations, a visiting fellow at the German Marshall Fund, and an on-air contributor to CBSN. He is writing a book about China’s influence in America. Prayuj Pushkarna contributed research to this article.