Beijing Orders Alibaba To Dump Media Assets That Rival China's Propaganda Machine
Beijing Orders Alibaba To Dump Media Assets
That Rival China's Propaganda Machine
BY TYLER DURDEN MONDAY, MAR 15, 2021 - 07:30 PM
Beijing is reviving its crackdown on the country's biggest tech
firms, reminding the world that the CCP is still focused on neutralizing any
and all threats to its control of the Chinese economy and its people. Even
after amending China's official ideology to include entrepreneurs among the
protected classes represented by the CCP (in addition to workers, farmers and
soldiers), Beijing, with President Xi at its center, has apparently decided
that Chinese tech firms won't follow the American model after all. Instead,
their growth and competitive capabilities will be curtailed for the sake of
stability at home.
After Tencent was censured and strict new requirements were
officailly imposed on Alibaba-owned Ant Group that will
prevent the company from growing, the Wall Street Journal reports
that next up on Beijing's to-do list is to force Alibaba to dump its array of
media outlets. Presumably, Beijing sees these outlets as an unwelcome
competitor to Beijing's own propaganda machine.
Alibaba's media portfolio includes ownership of the South China
Morning Post, Hong Kong's most widely read
English-language newspaper, which has an audience far outside of Hong
Kong. The paper often struggled with its coverage of the
unrest in Hong Kong, occasionally adopting the language of the CCP (like
referring to the demonstrators as "rioters") while still managing to
rankle Beijing with its detailed coverage of the demonstrations.
According to WSJ, the CCP has been "discussing"
whether to force the divestitures since early this year. Chinese
regulators have been "reviewing" a list of media assets owned by
Hangzhou-based Alibaba, which earns most of its money via
an online retail business. Officials were appalled at how extensive Alibaba's
media interests have become. Now, Beijing is asking Alibaba to devise a plan to
"curtail" its media holdings.
imagine if President Trump tried to force Amazon to sell the Washington Post.
In a statement delivered to WSJ, Alibaba said it's merely a
passive investor in these media companies, and doesn't exercise any sway over
"The purpose of our investments in these companies is to
provide technology support for their business upgrade and drive commercial
synergies with our core commerce businesses. We do not intervene or get
involved in the companies’ day-to-day operations or editorial decisions,"
the statement said.
Here's a roundup of Alibaba's media holdings courtesy of WSJ:
Alibaba owns 100%
of the South China Morning Post, Hong Kong’s premier English newspaper.
nearly 37% of Yicai Media Group, one of China’s most influential news
Alibaba owns about
30% of Weibo, a Twitter-like social media platform. Its stake is valued at
more than $3.5 billion.
Alibaba owns 6.7%
of Bilibili, a video platform that is popular among younger Chinese
people. Its stake is worth nearly $2.6 billion.
Ant owns 16.2% of
36kr, a U.S.-listed digital media outlet focused on technology. Its stake
is worth $25 million.
Alibaba owns 5% of
Mango Excellent Media, a subsidiary of government-run Hunan TV. Its stake
is worth about $819 million.
nearly 5.3% of Focus Media, China’s largest offline advertising network.
Its stake is worth nearly $1.2 billion.
Ant owned a 5.62%
stake in Caixin Media, one of China’s most respected news sources. It sold
its interest in 2019.
Shares of BABA were down on the news.
But Alibaba has a track record of interference that seems to
contradict this statement. Alibaba, which owns a stake in Chinese social media
giant Weibo, once made a slew of Weibo posts about a senior Alibaba executive
having an extramarital affair disappear, according to WSJ. Back in June,
China's internet watchdog publicly reprimanded Weibo for "interference
with online communication" and asked the company to "rectify the
A few months later, Xu Lin, a vice-director of the Party’s
central propaganda department, said during a November public forum that China
must "resolutely prohibit dilution of the party’s leadership in the name
of [media] convergence, resolutely guard against risks of capital manipulating
public opinion." Though he didn't cite Alibaba by
name, the implication was clear.
This isn't Beijing's first swipe against Alibaba - far from it.
Following founder Jack Ma's
disappearing act, Antitrust regulators are preparing to levy a
record fine in excess of $975MM over "anticompetitive practices" mentioned
above. An even bigger question looking ahead is whether Alibaba will also be
forced to divest its entertainment assets, holdings which are even larger than
its news offerings, and which include the Hong Kong-listed Alibaba Pictures
Group. Per WSJ, CCP members bristle at the notion that Alibaba has used its
media and entertainment holdings to influence government policy.
While this is a routine occurrence in the US, trying to
manipulate the CCP is verboten in China.
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