Star US economist Stephen Roach has long defended the future viability of China's tech sector. But the recent crackdown on innovation leaders by the government has him doubting.
By
Working from nine in the morning to nine at night, six days a week: this is the work culture of big tech companies, known in China as "996". But 996 has come under criticism. As pressure from both the public and regulators increases, changes are now on the horizon.
By Redaktion Table
Chinese tech stocks recovered on Thursday. But investors remain skeptical whether the worst is over. Beijing announced its intention to further regulate the sector with a major campaign over the next six months.
By Redaktion Table
Up until now, an investment in China's rapidly growing market for private education was considered a surefire bet. But now Beijing is cracking down on the industry with astonishing aggressiveness. At the stock market, vendors are experiencing a dire situation. However, whether these new rules will actually allow for more free time for stressed students and more equal educational opportunities, is a matter of doubt.
By Redaktion Table
Beijing's action against Didi appears to be just the beginning of a wider campaign to seize control of China's thriving tech sector. China's tech entrepreneurs are in for a rude awakening. Meanwhile, Washington's worries may have unfounded. The Chinese government seems to be doing everything in its power to lose its tech race with the US.
By Redaktion Table
Spirits were high when the stock of Chinese ride-hailing service Didi went public in New York. However, just two days later Beijing started a crackdown campaign against the company. Western investors are becoming increasingly skeptical about Chinese IPOs.
By Redaktion Table
Following the state-enforced closure of the Apple Daily newspaper, other China-critical media in Hong Kong are also fearing for their future. The National Security Act hangs over the editorial offices like a sword of Damocles. Even the renowned South China Morning Post is rumoured to be sold to a Chinese investor loyal to the state, who could turn it into an instrument for Beijing's propaganda.
By Marcel Grzanna
Alibaba Group is the largest IT group in China and one of the most valuable companies in the world. The China.Table editorial team has current Alibaba News.
Alibaba Group was founded in 1999 by Jack Ma and 17 friends. The group had a starting capital of $60,000 at the time. Originally, Alibaba served as a B2B platform, which it still is today. Early on, Goldman Sachs and Softbank stepped in with $25 million in seed funding. In 2005, Yahoo bought 40 percent of the company for $1 billion. Softbank still owns 24.9 percent of the stock today. Jack Ma and his family own 2.57 percent. Yahoo had created Altaba in 2017 with the sole purpose of managing Alibaba shares. However, in 2019, Yahoo decided to sell the remaining eleven percent of its shares. In the process, the Americans raised about $40 billion.
Early on, the then CEO Jack Ma recognized the potential of various Internet services. As early as 2003, he founded the auction platform Taobao. When eBay wanted to enter the Chinese market in the same year, he strictly refused to sell the platform to the Americans. Taobao developed into the largest C2C platform in China. In 2004, Alibaba Group presented the Alipay payment system. Already in 2014, half of all online payment transactions in China were processed with Alipay. Alibaba Group expanded the application to include various services such as online banking and micro-loans. After a re-branding, the subsidiary is now called Ant Financial and is considered the world's most valuable startup, with an enterprise value of $150 billion to $200 billion.
Alibaba.com, B2B trading platform
AliExpress, B2C trading platform
Taobao, auction house
Ant Financial, financial services
Alipay, online payment system
Aliyun OS, web service for cloud computing
Alibaba Cloud, cloud computing provider
1688.com, B2B trading platform (China regional)
amap.com, online map service
Alibaba Pictures Group, film producers or investors
Tmall.com, online department store
juhuasuan.com, discount website
Alibaba Group's name comes from its founder Jack Ma and is actually based on the story collection "One Thousand and One Nights". In it, Ali Baba, a woodcutter, discovers a treasure chamber that can only be opened with the words "open sesame". As Jack Ma sat in a sidewalk café in the USA, he randomly asked thirty passersby if they knew the name. All of them answered in the affirmative. So he chose the name because of its enormous familiarity. Jack Ma was CEO of Alibaba Group until May 2013. Then Lu Zhaoxi took over this post. In September 2019, Jack Ma retired from the company completely. Currently, Yong Zhang is the CEO of Alibaba Group. Jack Ma has always tried to give Alibaba a customer-friendly face. When the global financial crisis began in 2007, he cut prices for end customers by sixty percent, much to the anger of investors. However, the number of customers increased so much that revenue remained the same.
There are two types of Alibaba stock traded on the stock market. The more expensive Alibaba stock and the much cheaper Alibaba Group stock. They are the same company. The difference is that they are two different securities in two different marketplaces. The expensive Alibaba stock is traded on the New York Stock Exchange. This is where most of the trading volume takes place. These are depositary receipts - so-called ADR (American Depositary Receipts). One ADR is worth eight shares of Alibaba Group, which are traded in Hong Kong. Alibaba.com was already traded on the Hong Kong Stock Exchange between 2007 and 2012. However, Jack Ma delisted the company because he felt that shareholder pressure was hindering the company's development. The dispute over the price reduction was one reason. One of Jack Ma's principles is: "Customers first, employees second, shareholders third."
When Alibaba went public again in 2014, it raised $21.8 billion. At the time, it was the largest IPO in history. Alibaba raised more money than Google, Facebook and Twitter combined. The traditional bell for the IPO was rung not by Jack Ma, as would have been customary, but by eight of the company's customers.
At the end of 2020, the financial services provider Ant Financial should have gone public. Experts assumed that this would have raised $37 billion for the company. It would have been a record IPO. But Chinese banking regulators halted the process. Officially, it was said that there were significant regulatory changes. Unofficially, it is suspected that Jack Ma's criticism of the Chinese financial market regulator may have something to do with it. An example should be made of the entrepreneur and billionaire. Because at the same time, billion-dollar fines were imposed on Alibaba. Jack Ma must also part with shares in Ant Financial.
Readers can find out how the Alibaba Group is developing from the Table.Media editorial team. Read all current Alibaba News.
