Could Xi Jinping’s recent meeting with Jack Ma be a strategic move to better prepare China for a trade conflict? Can it help boost the already troubled Chinese economy? These are just some of the questions that have arisen over the last week since Jack Ma and several other influential Chinese business leaders met with the Chinese President. Could the strategy be to position Jack Ma as the CCP’s answer to Elon Musk? We explore the story today.
Inspirational leader for some, complicated public figure for others, Jack Ma reappeared on the Chinese market again this month, but did he appear with a bang, or was it more of a silent whimper? It wasn’t the first time that Jack had reappeared since his infamous fallout with the Chinese Communist Party (CCP) in 2020. DisruptionBanking previously reported how Jack Ma had criticized the Chinese government in a speech in October 2020.
The fallout with Jack Ma occurred not long after the release of China’s Central Banking Digital Currency (CBDC) in August of 2020. At the time, Ma’s Alibaba was purported to have been a competitor to what the government was trying to achieve.
The BRICS Meeting in October 2024
From October 21 – 24 Sibos, the leading banking event, took place in Beijing. At the same time the BRICS nations met in Russia. Ironically, during the BRICS summit Russian President Vladimir Putin discussed payment infrastructure between BRICS countries. The BRICS summit, held from October 22 – 24, included Egypt, Ethiopia, Iran, the UAE, and the other BRICS nations, namely India, Brazil, Russia, China, and South Africa.
Gustavo de Carvalho, Senior Researcher at the South African Institute of International Affairs shared his thoughts on the BRICS summit. He explained that the BRICS Cross-Border Payment System, discussed at the summit, “aims to facilitate trade in local currencies. It is a step towards cheaper, more efficient transactions.”
Additionally, discussions at the summit touched on a New Development Bank (NDB), which aims to “provide 30 percent of financing in the local currency of borrowing members.” BRICS members’ central banks are clearly being encouraged to collaborate more closely.
Does the Chinese Economy Need a DOGE?
Since Evergrande’s collapse highlighted the Chinese economy’s overreliance on the real estate sector, China has invested in manufacturing, which has seen significant growth in recent years. China’s GDP grew by 5% in 2024, achieving its growth target. Manufacturing has been one of the highlights, according to market reports. However, it’s not all good news. Production and new orders fell to a five-month low, according to PMI data from last month. Exports are down to the worst level since last February. Factory activity is also a worry as companies struggle with falling demand.
With economic uncertainty looming, China needs to turn to innovative companies like DeepSeek, Ma’s Alibaba, and others. The economy needs a big jab before the bureaucracy can be looked at by a DOGE-type disruptor.
What Happened at Xi Jinping’s Meeting with Jack Ma and Other Business Leaders?
On February 17, Xi Jinping met with the founders and CEOs of Xiaomi, Huawei, Tencent, CATL, BYD, DeepSeek, Meituan, and Alibaba (amongst others). These companies represent some of China’s most influential tech firms, raising speculation that the government could be ending its crackdown on the tech sector. .
Food security is highlighted as one of the areas of focus for the Chinese government. The other is the high tech manufacturing sector, specifically satellite, AI, robotics, and data analytics. Importantly, the leaders of Huawei, BYD and Xiaomi (amongst others) spoke at the meeting. The minutes have not been made public. There is no record that Jack Ma spoke at the meeting.
Notably absent from the meeting were executives from Baidu and ByteDance, the parent company of TikTok. The omission might be unsurprising in the case of TikTok, however, Baidu’s share price dropped on the day of the meeting.
The South China Morning Post, owned by Jack Ma’s Alibaba, reported that Chinese stocks surged after Xi Jinping’s meeting. However, they were already looking bullish due to good earnings reports in the preceding days.
How Are U.S. China Relations Today?
There are new tariffs already in place on China by the U.S. These are 10% at the moment, but in the case of steel and aluminium 25%. Lawmakers in Beijing will be hoping things don’t get worse as exports are already feeling the effects of the initial tariffs.
Before the inauguration of President Trump, at the very beginning of January this year, 28 U.S. entities were added to China’s export control list. Lockheed Martin is one of the companies listed. The reasons included arms sales to the Taiwan region.
There is an elephant in the room. Peace talks between Russia and the U.S. over Ukraine. Peace talks that Beijing had hoped to be involved with. Only recently, the Trump administration’s Russia-Ukraine envoy Keith Kellogg told a panel discussion in Munich that the US hoped “to force” Putin into actions he was “uncomfortable with,” which could include disrupting Russia’s alliances with Iran, North Korea – and China.
Resolving the conflict in Ukraine would free up the U.S. to tackle China. Ideally with less allies in place than it has today. Which is where the relationship with the tech leaders could take a twist.
Will Jack Ma Help the Chinese Communist Party?
For now the biggest takeaway from Xi’s tech meeting has been a renewed interest in China’s tech stocks across markets in China, Hong Kong, and New York. However, many western media outlets have written stories over the weekend suggesting that Jack Ma and other tech leaders in China will need ‘more than just warm words’ to thrive.
Just like Elon Musk’s early involvement with PayPal and his tech giant status, Jack Ma remains a critical player in China’s payment and tech sector. Alibaba’s share price has surged in February, ending trading last Friday at over $143. A far cry from the $76 it was trading for a year ago. The company continues to be recommended as a ‘Strong Buy’ on TradingView.
Xi Jinping doesn’t have much time to cultivate a new wave of tech entrepreneurs comparable to those seen around Trump during his inauguration. Can Xi win over firms like DeepSeek? Firms who operate on lean budgets, and have implemented their own version of DOGE. With Trump likely to employ a ‘divide and rule’ strategy among BRICS nations, the CCP will have no choice but to embrace its tech sector more than ever before.
Author: Evelyn Fang
#China #CCP #XiJinping #JackMa #Alibaba #BRICS #USChinaRelations
See Also:
How DeepSeek Sparked a Tech Selloff in the U.S. | Disruption Banking
Why China Bursting Its Real Estate Bubble Is A Good Thing | Disruption Banking
How Cities like Tianjin are Enticing Foreign investment into China | Disruption Banking
