SinoInsight 1
On Nov. 27, Chinese financial magazine Caixin ran a report on declining job advertisements in China. Citing a research report by Chinese securities brokerage company Tianfeng Securities, Caixin wrote that job advertisements posted on Nasdaq-listed Chinese job recruiter website 51job.com fell to 830,000 ads in September 2018 from 2.85 million ads in April 2018, an over 70 percent drop.
Subsequently, Caixin and other media outlets that republished the Caixin article on job advertisements deleted the article.
OUR TAKE
1. The data in the Caixin report corroborates our Nov. 22 analysis that the Chinese economy’s “dismal performance has resulted in rising unemployment and a wave of business closures this year.” (link)
2. In our piece on Nov. 14, we analyzed why it might be difficult for Washington and Beijing to reach a trade agreement at the G20 summit in Argentina, and concluded that President Donald Trump will not ease up on mounting pressure on the People’s Republic of China.
We expect China’s economy to deteriorate further in the months ahead. The worsening economy will lead to more corporate closures and unemployment, which in turn increases the Chinese Communist Party’s political risk.
SinoInsight 2
Party mouthpiece People’s Daily published a list of 100 Chinese who made extraordinary contributions to the PRC’s “reform and opening up” over the past 40 years. Jack Ma, the executive chairman of Alibaba Group, made the list and was identified as a CCP member, a revelation that made international headlines.
Later, state media reported that Alibaba established a Party branch in the company in 2000, the second year of the company’s founding. The Alibaba Party branch was upgraded to a Party committee due to the increase of CCP members in the company. Presently, Alibaba and Ant Financial, an Alibaba affiliate, both have parallel Party committees. The parallel Party committees oversee nearly 200 branches and over 7,000 Party members, and take in nearly 600 new members each year.
OUR TAKE
1. The CCP propaganda apparatus and Jack Ma have kept Ma’s CCP membership relatively under wraps. However, there are “blink-and-miss-it” instances where Ma’s CCP membership was revealed. For instance, when Ma was elected president of the Zhejiang Merchant’s Association, the news website “World Zheshang Net” published an article which introduced Ma as a Communist Party member.
2. According to Jack Ma’s resume, he once taught English at the Hangzhou Institute of Electronic Engineering before doing business in 1991. It would be relatively normal for Ma to join the CCP as a school teacher given the perks that come with membership, such as better job promotion prospects.
If Ma joined the CCP after he founded Alibaba, however, there is a good chance that he was roped in to carry out united front work.
3. We believe that there are two likely reasons why Jack Ma’s CCP membership was made known in a high-profile manner.
First, the CCP needs China’s capitalists, especially the up-and-coming generation, to stand behind the Party. In other words, the CCP is doing united front work on the mainland. By prominently spotlighting Ma’s CCP membership, the CCP is signaling to the capitalists that they have to obey the Party to survive.
Second, the CCP may be trying to weaken Jack Ma’s appeal abroad. When the international community becomes suspicious of Ma and other Chinese capitalists, it would be harder for them to transfer their wealth and assets out of China as the economy worsens. Also, Ma will have difficulties in migrating to the United States given his membership in the Communist Party.
4. The CCP has stepped up pressure on Alibaba and other Chinese “capital giants” and sought to more tightly control these private companies in recent years. This is because the CCP cannot allow wealthy private firms to become too influential and eventual rival the regime. Facing CCP pressure, top executives of “capital giants” have made pilgrimages to revolutionary Red bases in Yan’an, and in the case of Jack Ma, don revolutionary garb and sing Red songs at a private business event. Ma recent announcement that he is retiring in a year is likely his attempt to signal to the Party that he is not about to challenge the regime.
