From Ant – the IPO that wasn’t – to Alibaba – the investigation and fine – to Didi – the post-IPO investigation that clobbered both the share price and future confidence in Chinese IPOs – in all these and more, Xi has been wantonly sowing fear, uncertainty and capital destruction among China’s richest and most powerful companies.
Amid this wealth destruction, the spearhead of China’s efforts to get a chip capability – Tsinghua Unigroup – has been allowed to go bust for lack of funds.
What on earth is going on?
Why has Xi ceased to care about the success of China’s leading tech companies?
Answer: Because he’s more concerned about something else.
The overriding obsession in Xi’s mind is the CCP’s National Congress in October 2022. It is at the Congress that he either gets elected to a third five year term or is dismissed from the presidency.
Until 2018 the rule was that a president could only serve two terms but, that year, the rule was changed allowing presidents to be appointed for an unlimited number of terms. Nonetheless they still have to be appointed.
This explains Xi’s extraordinary focus on increasing his domestic power and eliminating opposition. He is dead set on getting that third term.
Politically he has pretty much taken supreme power but there is a section of Chinese society where he does not have control and which has money, power and a huge stock of data on Chinese citizens – the tech companies.
So this is why Xi is acting so destructively against the tech companies. He is trying to bring them to heel so that they can do nothing to interfere with his over-arching ambition to win that third term in office.
For the sake of peace and quiet one hopes he doesn’t.