Chinese billionaire Jack Ma’s reappearance has sparked speculation about Beijing easing pressure on the private sector, but the real story runs deeper. Alibaba, Ma’s company, remains a potent symbol of China’s private sector success. But the company itself has changed from a retail giant to a pillar of China’s artificial intelligence and cloud computing ambitions, and its commercial dominance now takes a back seat to its strategic value to Beijing.
This convergence of economic necessity and industrial policy signals a broader shift. Private enterprise is again essential—but only within boundaries set by the state. Alibaba’s cloud infrastructure has become central to China’s push for self-sufficiency, tethering its future even more closely to national priorities.
Chinese billionaire Jack Ma’s reappearance has sparked speculation about Beijing easing pressure on the private sector, but the real story runs deeper. Alibaba, Ma’s company, remains a potent symbol of China’s private sector success. But the company itself has changed from a retail giant to a pillar of China’s artificial intelligence and cloud computing ambitions, and its commercial dominance now takes a back seat to its strategic value to Beijing.
This convergence of economic necessity and industrial policy signals a broader shift. Private enterprise is again essential—but only within boundaries set by the state. Alibaba’s cloud infrastructure has become central to China’s push for self-sufficiency, tethering its future even more closely to national priorities.
Chinese President Xi Jinping’s meeting this week with top CEOs sought to repair some of the damage done by previous policies. Over the past year, opaque and abrupt detentions of business leaders had made success a liability, stoking anxiety in the private sector. Many of these detentions appeared less about clear legal violations than cash-strapped local governments using fines and seizures for revenue.
In 2024 alone, executives from more than 80 listed companies were detained, often by authorities from regions unrelated to their businesses—a practice dubbed “long-range fishing” by Chinese media. This uncertainty has cast a shadow over economic recovery, diverting business leaders from innovation and growth to self-preservation.
Recognizing the risks, Premier Li Qiang has called for stronger oversight, signaling an effort to curb these detentions and reassure the private sector. However, with enforcement still opaque and the broader regulatory environment in flux, concerns over arbitrary crackdowns remain deeply embedded in China’s business landscape.
By convening China’s top entrepreneurs, Beijing sought to not only reassure the private sector but also draw a line under years of unpredictable crackdowns, signaling that the private sector remains indispensable.
This marks a tactical shift. Beijing still dictates the terms, but it now recognizes that a private sector paralyzed by fear serves no one. The era of unchecked ambition for China’s business leaders may be over, but so too, perhaps, is the era of indiscriminate punishment for those aligned with state priorities.
Alibaba has, in turn, been refitting itself to match those priorities and place itself at the heart of Beijing’s technological ambitions. Founded in 1999 by Ma, Alibaba began as an e-commerce platform but rapidly expanded into digital payments, logistics, and cloud computing. Today, it is one of China’s most influential private sector companies, operating at the intersection of commerce, finance, and technology. Like all major Chinese firms, it has always navigated a delicate balance between business ambitions and state priorities—negotiating the shifting boundaries of what is permissible and what is politically necessary.
For years, Alibaba was viewed primarily as an e-commerce giant, its AI and cloud investments overshadowed by its retail dominance. That perception is changing. DeepSeek’s AI breakthroughs have forced a reassessment of China’s capabilities, and Alibaba is emerging as the country’s best bet for scaling AI infrastructure.
The company’s cloud division, China’s largest, is uniquely positioned to support AI deployment across industries, from finance and health care to manufacturing and logistics. As U.S. export controls tighten, domestic computing power is becoming just as crucial as AI research itself.
Markets have responded accordingly. On Feb. 13, shortly before Reuters broke news of the upcoming meeting, Alibaba’s Hong Kong-listed shares surged to a three-year high, adding more than 600 billion Hong Kong dollars (about $77 billion) to its market cap this year alone. The Hang Seng Tech Index reached its highest level since early 2022.
By Feb. 17, as Xi convened the meeting, Chinese stocks surged again on policy-driven optimism but showed signs of fragility. Investors, eager for concrete commitments, engaged in profit-taking, reflecting uncertainty over the depth of government support. Tencent soared to a four-year high after integrating DeepSeek’s AI model R1 into WeChat, solidifying AI’s growing influence.
The Hang Seng China Enterprises Index climbed to its highest level since 2022, while Hang Seng Tech officially entered a bull market. DeepSeek’s breakthroughs fueled gains across AI-related sectors, particularly in health care and robotics. Meanwhile, China’s 30-year bond futures declined as capital rotated into equities, signaling renewed confidence in policy direction.
Alibaba’s role in this shift cannot be overstated. DeepSeek has proved that Chinese AI models can compete with Silicon Valley’s, but Alibaba owns the infrastructure necessary to scale those capabilities. Without robust cloud computing, AI research will rapidly hit a ceiling, and Alibaba’s dominance in that space makes it indispensable to Beijing’s long-term vision.
This shift was further cemented by its partnership with Apple, which has reportedly selected Alibaba as its AI partner for the Chinese market. For Apple, the partnership is a regulatory necessity, ensuring compliance while integrating AI capabilities into its devices. For Alibaba, it is a validation of its AI leadership and a strategic expansion into consumer-facing AI applications. In a time when foreign tech companies face increasing scrutiny in China, Alibaba is emerging as a bridge between global AI development and the domestic market.
Against this backdrop, Ma’s return takes on a different meaning. His sidelining in 2020 was not just about financial regulations—it was a broader political statement that no private entrepreneur, however influential, could operate beyond the state’s reach. His reappearance now does not signal a reversal but a tactical recalibration. With economic recovery still uneven and foreign investment hesitant, Beijing appears to recognize that private sector dynamism remains crucial and that Alibaba is uniquely positioned to use AI and adjacent industries as levers for growth.
Yet, while investor sentiment has turned sharply positive, the long-term policy environment remains unpredictable. China has a history of oscillating between supporting and restraining its private sector. The government’s priority is not just to foster innovation but to ensure that corporate power remains aligned with state interests. If Alibaba’s influence in AI and cloud computing is perceived as drifting too far from that alignment, policy could shift again just as quickly as it has turned favorable.
That is why Ma’s return, though symbolically important, is unlikely to herald a return to his past prominence. He appears to have absorbed the lessons of the past few years, adopting a more measured presence, staying behind the scenes while others take the reins. Unlike before, when he was Alibaba’s most vocal champion and even criticized regulators, Ma is now taking a strategically quiet approach.
For now, Alibaba finds itself aligned with Beijing’s ambitions. How long that alignment holds will depend on how well it navigates an environment where being rich and useful to the economy is tolerated—until it isn’t. The line between being an indispensable economic asset and a challenge to state authority remains thin, and in China, the ultimate decision on which entrepreneurs are welcomed and which are sidelined—or worse—rests with Xi.
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