Is Beijing thinking of more moves to rein in Jack Ma on top of the monopoly-busting crackdown and financial compliance probes targeting his e-commerce and online credit groups Alibaba and Ant?
Or has Ma been anticipating more scrutiny of his other entities and must take preemptive action to avert new penalties?
This week’s name change of Ma’s once high-profile Lakeside University, dropping the university status, has renewed rumors that Ma’s travails with the authorities may be far from over.
The institution, also known as Hupan University, was founded in March 2015 in Alibaba’s home province of Zhejiang. What triggered the name change could be Beijing’s updated law promulgated last week governing the establishment and running of non-publicly funded tertiary institutions.
The law stipulates that Communist Party organs must be set up in these universities and schools to supervise day-to-day teaching and operations even though they are not recipients of direct public funding or grants.
The law also sets out detailed review and approval procedures for these entities to report to the Ministry of Education before they can use the word “university” in their names and start enrolling students.
During this year’s parliamentary sessions, Education Minister Chen Baosheng warned that some non-public institutions had sought to work around laws and regulations and base their assertions of academic legitimacy on claims of affiliation with respected organizations not engaged in school and diploma accreditation.
He said these “fake universities” must now get registered with his ministry or risk being closed.
Hupan said in a statement distributed to some Chinese papers on Monday that the name change was intended to quell rumors and misunderstanding and to reflect its nature as a “not-for-profit research and training center” that would not have the power to confer degrees like a formal university.
It is also said that Hupan would set up a party committee. It did not, however, respond to rife talk that the Education Ministry had called for a halt to its admissions for autumn intakes. The enrolment information for the current academic year has been pulled from Hupan’s website.
Absent from mention in Hupan’s statement is Ma, its founding president.
Ma conceived the idea of setting up an elite university six years ago and lined up some other business heavyweights – Chinese personal computer giant Lenovo’s founder Liu Chuanzhi, Fosun Group founder Guo Guangchang, retailer Intime Group’s founder Shen Guojun, among others – as Hupan’s patrons and board members.
It appeared that registering with the Education Ministry for approval was the last thing on Ma’s mind when his business empire was in its heyday.
Hupan did not reply to inquires about whether it had the ministry’s formal approval in 2015 when Ma and his tycoon friends unveiled Hupan’s placard bearing the university title. The state-backed Global Times said on Tuesday it had failed to reach Hupan’s management for an interview.
Back in 2015, just like the market watchdog’s hands-off approach to regulating China’s freewheeling e-commerce, the Education Ministry opted to allow a pass on Hupan and no actions were taken despite extensive media coverage of its establishment.
Ma famously said that year that Hupan would go on for 300 years and he hoped that in 30 years it could train 3,000 entrepreneurs in the country and he would not mind if Hupan failed to turn a profit or some graduates became Alibaba’s competitors.
Hupan’s high threshold of admission was controversial from day one. Only senior executives and entrepreneurs from companies whose annual revenues exceed 30 million yuan (US$4.67 million) could apply, with the recommendation of three board members or listed referees.
Some likened Hupan to a VIP club or Ma’s exclusive networking party to form more alliances with tycoons and upstart entrepreneurs.
Still, Hupan’s first graduating cohort in 2018 included Fok Kai-man, grandson of Hong Kong’s pro-Beijing business magnate Henry Fok who once held state leader status, Zhang Xuhao, CEO of Alibaba’s online food delivery service as well as Su Hua, co-founder of Tiktok’s key rival Kuaishou, now listed on Hong Kong’s bourse.
But apparently Ma’s changing fortune since late last year has taken the luster off Hupan. Ma has faced Beijing’s one-two punch of halting Ant’s blockbuster initial public offering in November, followed by an anti-trust investigation into Alibaba’s “monopolistic” practices that led to a record-setting fine meted out by the State Administration for Market Regulation in April.
Ant’s business model is still believed to be under Beijing’s microscope, with reports saying that Chinese watchdogs have requested Ant to be subject to the same set of reserve ratio requirements as traditional banks.
Citing its observers and comments by some Chinese netizens, Singapore’s Lianhe Zaobao newspaper compared Ma’s Hupan with ancient China’s academic and semi-political outfits, think tanks and coteries known as the Donglin Party formed by scholars and businessmen in the Ming dynasty.
Donglin clique members sought to grow their influence to sway public discourse, politics and skew policymaking to their advantage but eventually triggered a crackdown by Ming emperors, who grew fearful of Donglin’s growing clout and ordered the organization to disband.
Eric Mer, an associate professor of politics at Peking University, told Asia Times that given Ma’s influence had long spanned lines of business and geographies as well as his enthusiasm in media and education, Beijing had reasons to further curtail the heft of a plainspoken tycoon who dared to criticize its policies.
“Ma’s Alibaba owns Hong Kong’s major English newspaper the South China Morning Post and he is the founding president of an elite university, or an exclusive business school that pools other big names,” Mer said.
“All these will not sit well with Beijing given the weight a big newspaper and a university can carry.
“Now that Beijing has opened the first salvo of a regulatory crackdown against Ma’s business empire and more may still come, it would be wise for Ma and all the entities under him to lie low from now on. Ma must know too well the fate of Donglin so a name change for Hupan to comply more with updated laws will be a good idea,” said the scholar.