Shares of Chinese e-commerce companies headed by Alibaba in Hong Kong stocks tumbled on May 3 after a CCTV text message about the criminal coercive measures against Ma in Hangzhou triggered a market sell-off. The outside world thought that this “Ma” was Ma Yun, but it turned out that it was purely an oolong. However, the incident also reflects that investors are still in the dark about China’s technology industry being purged by regulators.
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According to online screenshots, the CCTV news client released a short message just after 9:00 a.m. on Tuesday, saying, “Hangzhou State Security Bureau is colluding with foreign anti-China hostile forces in accordance with the law, and is suspected of engaging in inciting secession, inciting subversion of state power, etc. to endanger national security. The activist Ma took criminal coercive measures, and the case is currently under in-depth investigation.”
The press release, which usually states only the last name but not the first name, was widely circulated. However, the combination of “Hangzhou”, “Ma” and “national security” has led a large number of netizens to mistakenly believe that the target may be Jack Ma, the founder of Alibaba headquartered in Hangzhou. The concerns underlying this misunderstanding were quickly transmitted to the Hong Kong stock market, resulting in a violent fluctuation.
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Shares of Alibaba, which is listed on the Hong Kong stock market, plunged as much as 9.4%, erasing a market value of $260. At around 10 o’clock, the Hang Seng Technology Index fell by more than 5%, Meituan fell by more than 8%, Jingdong Group fell by 7%, Bilibili fell by nearly 7%, Baidu fell by more than 6%, and Xiaomi also fell by more than 6%. Many other stocks followed suit, with investors selling in panic.
Later, Hu Xijin, the former editor-in-chief of the Global Times, who was ridiculed by netizens as “Hu Diapan”, posted on Weibo, “According to Lao Hu’s confirmation to the authorities, the Hangzhou State Security Bureau arrested ‘Ma Moumou’, not ‘Ma XX’. X’. The reports that write about ‘Ma X’ are all inaccurate.”
Subsequently, the official CCTV news account sent the same text message at 10 o’clock, changing “Ma” to “Ma”. The Hangzhou police also clarified that the detainee’s name was three-character Ma Mou, not two-character Ma Mou.
Some netizens also took the opportunity to be humorous, saying that as soon as the word “Ma Moumou” came out, Tencent’s stock plummeted immediately. People thought that Ma was referring to Ma Huateng, the CEO of Tencent.
According To Global Times
The English version of the Communist Party’s mouthpiece Global Times said it exclusively learned that “Ma Moumou” is the director of the hardware R&D department of an IT company. Since March this year, Ma Moumou has been “brainwashed by foreign anti-China forces”, and under the instigation of “anti-China people”, he has created an anonymous group online, played the role of an agent of foreign forces, spread rumors, and false information, and published so-called independent Manifesto to split the country and subvert the regime.
Alibaba’s shares recovered after the state media’s clarification of the content of the text messages. By midday, the decline narrowed to less than 2%, and the Hang Seng Technology Index also rebounded sharply, recovering most of the lost ground.
Bloomberg said Beijing’s crackdown on every corner of cyberspace over the past year is still worrying investors. The purge began at the end of 2020 when it called off the initial listing of Ant Group, founded by internet tycoon Jack Ma.
Subsequently, Beijing began a series of actions to clamp down on private technology companies. The State Administration for Market Regulation fined Alibaba Group 18.2 billion yuan ($2.78 billion) in April 2021 for its so-called “monopoly”, the highest since China’s “anti-monopoly law” came into effect.
A few days later, another technology giant, Tencent, was also targeted. The General Administration of Supervision accused Tencent of violating the “anti-monopoly law” and imposed a total of 1 million yuan in administrative penalties.
The State Administration of Supervision waved the knife again in July and November, and online platforms in different industries such as Alibaba, Didi, Tencent, Suning, Meituan, Baidu, and JD.com were all accused of violating the Anti-Monopoly Law, and fines were imposed for each case involved RMB 500,000.
In addition, after the online car-hailing leader Didi Chuxing went public in the United States at the end of June, its market value rose to a maximum of 80 billion US dollars, but it was listed less than a week ago. All Didi apps have been removed from the App Store. Seven major departments including the Cyberspace Administration of China then moved to Didi to conduct cybersecurity reviews. At the beginning of December, Didi finally lost to the “national security” hat, announced the start of delisting procedures on the New York Stock Exchange, and prepared to go to Hong Kong for listing.
The Politburo of the Communist Party of China met last Friday to confirm policies to boost the economic activity of large internet companies, the Nikkei reported on Tuesday. Authorities will finalize regulations to strengthen oversight of these companies, as well as measures to support their healthy growth.
The report said that this is apparently a policy adjustment by the authorities to revive the Internet industry after Russia invaded Ukraine and the economy lost momentum after the outbreak of the Omikon epidemic.