Jack Ma’s meeting with Trump was a watershed moment in his relationship with Beijing

Hong Kong: It was going to be Jack Ma’s best hour: his Ant Group was supposed to go public in a $37 billion blaze of glory a year ago to the day. Instead, Beijing curtailed his dominion, severing the largest corporate China star’s wings.
Now, the billionaire Alibaba e-commerce entrepreneur is taking his first timid steps back on the global stage with a low-key trip to Europe, where he’s cultivating like horticulture, to the cautious delight of investors.

It’s a far away from Ma’s statesman-like skills peaking in 2017 when he flew to New York to see President-elect Donald Trump for one-on-one meetings in Trump Tower just days before his inauguration and vowed to generate a million jobs in the United States.

According to four people close to Alibaba with knowledge of the matter and one Beijing official source, the Chinese government first learned of the meeting and jobs pledge along with the rest of the world when Ma held an informal broadcast Q&A session with reporters in the lobby of the building.

According to two people familiar with Alibaba, Chinese officials informed the company’s government relations team that Beijing was displeased with Ma meeting Trump without their prior agreement.

A request for comment was sent to Ma’s nonprofit organization, which handles his media inquiries.

Requests for comment were not returned by the State Council Information Office or the Ministry of Foreign Affairs. Due to the sensitivity of the situation, all of the sources declined to be identified.

The meeting on Jan. 9 took place amid high tensions between the two countries, following Trump’s election campaign criticism of China, which he blamed for the loss of American jobs.

A request for a response from Trump’s spokeswoman was not returned.

According to four people close to Alibaba, the meeting marked a negative turning point in Ma’s relationship with Beijing. They didn’t go into detail about what they were thinking.

Investors are ravenous for information on Ma’s situation: his mere glimpse on the Spanish island of Mallorca last month, his first trip overseas in over a year, boosted Alibaba’s value by as much as $42 billion.

As he approaches what may be a record-breaking third term as China’s leader and exerts greater control over some of the country’s most inventive enterprises, the narrative of his slide from official favor helps to demonstrate how quickly China has changed under Xi Jinping.

‘A NATURAL PRIMARY OBJECTIVE’

After giving a speech in Shanghai in October last year accusing financial watchdogs of suffocating innovation, authorities slapped down on Ma’s corporate empire.

As he approaches what may be a record-breaking third term as China’s leader and exerts greater control over some of the country’s most inventive enterprises, the narrative of his slide from official favor helps to demonstrate how quickly China has changed under Xi Jinping.

‘A NATURAL PRIMARY OBJECTIVE’

After giving a speech in Shanghai in October last year accusing financial watchdogs of suffocating innovation, authorities slapped down on Ma’s corporate empire.

“Given that Jack looked to be overly confrontational, out of line with Xi’s new governance approach, he was a suitable first target to demonstrate that a big change had occurred,” said Duncan Clark, chairman of Beijing-based investment advice firm BDA China and author of a book on Alibaba and Ma.

“At events like Davos or on his own trips abroad, Jack was regularly rubbing shoulders with foreign presidents, prime ministers, nobility, and celebrities. In Hangzhou, too, there was a steady stream of VIP guests to see him.”

Ma’s global outreach, on the other hand, did not end with the Trump summit.

According to Alibaba’s news portal Alizila and media reports, he met with a number of high-profile figures between 2018 and 2020, including United Nations Secretary-General Antonio Guterres, Queen Rania of Jordan, Malaysia’s veteran politician Mahathir Mohamad, and then Belgian Prime Minister Charles Michel.

According to another individual close to Ma, Alibaba’s Hangzhou headquarters has a building holding the company’s museum, where Ma and his business partner Joe Tsai would take international guests and show them around.

Tsai did not respond to an Alibaba request for comment.

Meetings with foreign politicians were considered by Ma as “unofficial diplomacy” for China, which he loved, according to the source.

According to Reuters, Alibaba has a visitor receiving facility known as Pavilion 9 that provides a visual tour of the company’s history as well as an overview of its companies. It noted that the exhibition area at its headquarters had received a diverse range of visitors.

Other questions for this report were not answered by the corporation.

‘JUST LIKE YOU AND ME,’ says the narrator.

In the weeks following the barring of Ant’s listing, Ma requested an audience with at least two members in Xi’s inner circle, but his requests were turned down by both, according to two separate sources briefed by those persons.

According to a government source, the millionaire wrote directly to Xi early this year, promising to devote the rest of his life to China’s rural education. The president discussed the letter at a meeting of the country’s senior leaders in May.

Reuters was unable to ascertain if Xi accepted or rejected the offer, which had not previously been publicized, or when Ma, a former English teacher, penned the note.

According to a person familiar with Ma’s itinerary, he was in Europe last month on an “agricultural and technology study tour connected to environmental issues,” according to the Alibaba-owned South China Morning Post.

Ma was photographed wearing a white safety gown and holding flowerpots in the newspaper last week. It quoted persons acquainted with his plans as saying he will continue touring European enterprises and research institutions involved in agricultural infrastructure and plant breeding.

In a rare interview on the mysterious billionaire with CNBC’s Squawk Box show in June, Tsai, the co-founder of Alibaba, played down his long-time associate’s influence.

“Right now, he’s keeping a low profile. Every day, I speak with him “Tsai explained. “I don’t think the concept that Jack has this vast amount of power is correct,” he added.