The biggest threat to Chinese companies is right at home
Before CPP President Xi Jinping’s rise to power, many in Washington D.C. still hoped that China was on a secure (albeit slow) path to political and economic liberalization. These hopes, matched by Chinese economic ambition, spurred a global embrace of Chinese companies. Over the past decade, however, Chinese companies have come under increasing scrutiny in the United States, as Washington D.C. has watched Chinese companies remain dangerously intertwined with the Chinese government, raising national security alarm bells in both parties.
Last year was filled with concerns about CCP control of Chinese companies, but the best example of why the world should be wary of Chinese companies isn’t Huawei or TikTok, but the saga of Jack Ma and Ant Group. Jack Ma, Chinese business mogul, long a proponent of a more open and market-driven Chinese economy, recently attracted the ire of the CCP—and the results have not been pretty. China-watchers noticed late October that Jack Ma had apparently disappeared after making comments criticizing Chinese financial policy, prompting many to wonder if the Alibaba and Ant Group leader should be added to the ever-growing list of Chinese businessmen who have vanished after getting in the CCP’s crosshairs. Ma finally resurfaced in 2021, only to see what should have been Ant Group’s public debut personally squashed by Xi out of anger at Ma’s criticism and concerns that Ant Group’s initial public offering (IPO) would financially benefit Xi’s rivals.
The protestations of independence of many Chinese business officials may reflect their earnest desires to maintain some separation between their companies and the CCP. But given the reality of the political and legal context they live in, these promises of data privacy are simply too naive to be believed. The CPP has shown itself, time and time again, too willing to intervene in the name of party interests. The pressure on Jack Ma is hardly the first time the CCP has stepped in to punish a company or CEO they feel stepped out of line. As noted in this article from Forbes, “in recent years at least half a dozen other billionaires and wealthy businessmen have vanished from public life for a period of time after running afoul of the Chinese Communist Party.”
The CCP’s treatment of Jack Ma and Ant Group should be considered a warning to Chinese companies who have spent the past four years trying to persuade U.S. government officials that they are independent entities who could successfully resist interference from the Chinese government. As long as the CCP continues to blur the line between the private and public sectors, Chinese companies will be viewed with suspicion in the United States.
While Chinese companies may hope for greater leniency now that Biden has been inaugurated, they are unlikely to see too much of a reprieve. National security concerns continue to top the list in the new administration and they will inevitably need to address the inherent problem of Chinese products integrated into significant portions of American critical infrastructure. But Chinese companies shouldn’t fault the U.S. government for its skepticism. The CCP’s troubling silencing of Jack Ma and tight control of Ant Group proves that the greatest enemy of Chinese companies abroad isn’t the U.S. government or U.S. companies, but the Chinese Communist Party.
Image credit: Aritra Deb