Is China’s communist party getting business-friendly?

After China’s Deepseek AI bot rocked the world’s markets and capitals last month, China’s private sector is now throwing the kind of party you just can’t ignore. How big? A $1.3 trillion rally. Big enough to attract the VVVVVVVIP himself, China’s leader, Xi Jinping.

Xi hosted China’s top business leaders at a forum in Beijing yesterday (Monday), and the highly choreographed affair is already being heralded as a turning point.

Why? Aside from Xi himself, cameras were all trained on Jack Ma, the billionaire Alibaba co-founder clapping cheerfully in the front row. And to recall why that’s such a striking image, it’s worth a quick refresher on Ma — the 60-year-old founded Alibaba in the late 1990s, and by the 2010s, he was a household name: the US had Bezos, China had Ma.

He was on a winning streak, too, expanding into new sectors and amassing a personal fortune that peaked at over $60B by 2020. But that’s also when Ma made a mistake.

Speaking at a summit in Shanghai, Ma famously dunked on China’s regulators as risk-averse and ruthless, strangling China’s innovation and growth. And sure enough, within a month, those same regulators then axed Ma’s plans for the world’s biggest-ever IPO, wiping $850B off Ma’s empire and cutting his personal wealth in half. More ominously, he then basically disappeared from public life, making only a few fleeting appearances since.

Why? Ma’s comments seem to have jolted China’s rulers, who responded with a series of crackdowns aimed at putting tycoons back in their place, while Xi emphasised a new focus on ‘common prosperity’ aimed at curbing tycoon excess and spreading the spoils.

So Ma’s problem became everyone’s problem:

• Authorities hit tech giants like Alibaba, Tencent, and Didi with antitrust fines
• Sectors like online education, gaming, and ride-hailing got their wings clipped, and
• That was after Beijing already started buying ‘golden shares’ in key tech firms like ByteDance and Weibo, furthering the Communist Party’s presence across the economy.

The net result of all this was trillions in wiped value and heightened uncertainty among the private sector, with up to a third of China’s estimated 1,200 billionaires then quietly leaving the country from 2021 and bringing their cash with them. 

So to now see Ma smiling and clapping in the front row? That suggests:

• a) Xi has now forgiven Ma, and/or
• b) Xi needs the tycoons again.

And there are reasons to believe it’s probably both a) and b).

First, Intriguers will know China’s economy has been struggling lately:

• Its population began shrinking in 2022 for the first time in 60 years
• Its ongoing property sector collapse might’ve shredded up to $18 trillion, and
• That’s helped push China into a deflationary spiral that’s now run into its seventh consecutive quarter, matching a record set during the 1990s Asian Financial Crisis

So Xi has no shortage of dash-lights flashing red, which might help explain why…

Second, and heading back to where we started, Xi’s speech at yesterday’s summit emphasised the need for “healthy” private sectorgrowth. He then got a big state-run ‘yeah 🤘’ from both the Global Times, urging firms to seize the day, and the China Daily, which assured readers that “concrete efforts” are coming — even China’s quasi-parliament says it’s now reviewing laws to support the private sector next week.

So all that — plus Ma even getting a handshake from Xi — has offered hope that maybe China’s economy is now back on track with another helping hand from Beijing.

INTRIGUE’S TAKE

While everyone marvels at Ma clapping in the front row, it’s easy to gloss over who was actually presiding over the formalities from up on stage: a guy called Wang Huning.

Wang is basically the Party’s chief ideologue, and Xi’s closest brains trust in pursuing domestic reforms to centralise power. His original claim to fame was actually his 1992 book America Against America on his experiences as a visiting scholar in the US, including observations about America’s decline, but also its strengths.

So… who cares? Well, if you look at this surprise summit, its surprise guest, his surprise front row seat, and surprise handshake, plus Xi’s surprise tycoon rallying cry, you might interpret that all as a signal that China is back in business, with Xi himself cheering on.

But if you then interpret those exact same facts with the extra fact that it all played out under the firm stewardship of Wang Huning himself, the signal starts to appear rather different: yes, Xi wants and needs his private sector, but still at the direction of — and in alignment with — his same Party-led, state-centric vision for China.

Also worth noting:

• Other attendees included Huawei’s Ren Zhengfei, BYD’s Wang Chuanfu, Yu Renrong from Will Semiconductor, Wang Xingxing from Unitree Robotics, and Xiaomi’s Lei Jun, plus DeepSeek’s own Liang Wenfeng.
• Meanwhile, two notable absences included the CEOs of Baidu (China’s Google) and ByteDance (the owner of TikTok). It’s unclear why they weren’t invited, but their absence has rattled markets with fears the two might’ve fallen out of Xi’s favour, shaving 7% off Baidu in a single day.