Everywhere, as President Xi Jinping tightens his grip, it becomes increasingly difficult to separate the individual and the company from the party and the state in China. And more difficult to separate the notion off being Chinese to loyalty to that entity.
It has just been revealed that Alibaba founder Jack Ma is a party member. This is perhaps no surprise. But where once party membership was for many businessmen a nominal issue of no great significance, under President Xi Jinping the party has again become the spearhead of the state. Party cells within companies, big and small, are expected to drive policies in the interests of the party as the guiding hand of the state and the Chinese people.
It must now be assumed that other top executives at Alibaba are also members of the party cell, and hence decisions of significance must accord with Beijing’s perceptions of the national interest. Thus Alibaba’s huge international operations, and corporate governance of a New York listed company, are subservient to the party. These operations now include Hong Kong’s South China Morning Post broadsheet daily into which Ma has poured large sums to expand its on-line presence.
That Ma himself is to stand down from day-to-day management of Alibaba may suggest that, though a party member, his profile (not to mention wealth) is too high to be easily compatible with the party’s current ethos under the supreme leader, Xi.
For now at least Ma remains a visible and respected figure who made his money honestly, albeit with the support of the right people in Beijing.
Not so the former boss of the Hong Kong-listed Huarong Asset Management, Lai Xiaomin, who suddenly disappeared earlier this year and is detained on corruption charges. Lai had transformed Huarong from an entity created to manage bad bank assets transformed it into a vast and deeply indebted conglomerate. So eager are Huarong’s managers now to wipe Lai’s name out of its history that they organized an exchange of share certificates, the new ones to be without Lai’s name or signature.
This little bit of re-writing of history was spotted by ever-watchful corporate watchdog David Webb of www.webb-site.com who had earlier compiled a remarkable chart of the a myriad links between Huarong and China Minsheng Banking Corp and a myriad of listed and unlisted companies and individuals. It long thrived not only on the greed and opportunism of well-connected mainlanders but on the feeble nature of regulation in Hong Kong, particularly in relation to mainland enterprises. The Stock Exchange is often all too eager to attract mainland listings, even though it has limited access to information there, and after listing reluctant to upset well-connected individuals by enforcing regulations.
Standards are so low that at present, according to Webb, 41 listed companies are now in danger of being automatically de-listed because of disclaimed audits, leaving outside shareholders with no publicly tradable assets while in most cases fraud has probably been at the root of accounts deemed unworthy of the signature even of the more flexible auditors.
The identification of the party with the Chinese state and the Chinese people is also impacting ethnic Chinese overseas who are expected by Beijing to play their part in the rise of China. Whether they do so willingly or not, there is a danger for all. Australia has already seen the growth of anti-Chinese sentiment caused by the susceptibility of some politicians to financial support from recent rich arrivals from the mainland, and efforts to use students and recent migrants to push Beijing ideology and policies. The backlash is in turn often written off as white racism, which may well be an ingredient.
But more dangerous are the mostly hidden sentiments of indigenous peoples towards Chinese minorities in the context of Beijing’s expansionism in the so-called South China Sea (so-called because only about 70 percent of the coastline belongs to China and it is known by different names to different people).
Occasionally, these sentiments surface from respected, informed and liberal-minded commentators. Note these words from Solita Collas-Monsod, a retired professor of economics and Economic Planning Minister under President Corazon Aquino and now a regular columnist in the Philippine Daily Inquirer. Discussing why, according to a Social Weather Station survey, despite Duterte and Trump most Filipinos trust the US (+59 percent) and distrust China (-35 percent) she wrote:
“There seems to be no distinction between the Chinese people and the Chinese state, as there may be in the case of the United States. Actually, I have often observed, Reader, that a Chinese-Filipino will never state unequivocally that he/she s Filipino first and a Chinese second (meaning, his loyalty is to the Philippines).
“Combine this with the fact that most of our billionaires are Chinese-Filipinos and that Chinese-Filipinos (especially the males) seem to be culturally averse to marrying Filipino women, and they are some of the country’s most hates employers. It then becomes easier to understand the distrust factor….’”
She might have mentioned too the ill-will created by so many Chinese in Hong Kong, Singapore and Taiwan over the exploitation and abuse of domestic helpers from the Philippines (and other southern countries inhabited by people of darker hue than white-skin obsessed Chinese.
There is a red line which links Xi Jinping and the Communist Party to the Chinese state, to Chinese foreign policy to Chinese ethnicity and hence the position of Chinese overseas. Many of the latter need to make it clearer where their loyalty and identification lie.