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Chinese Internet Mogul Moving to Hong Kong

11/06/2013 23:15

By Zhang Dun, Epoch Times | November 6, 2013Last Updated: November 5, 2013 8:13 pm Taobao Revises Fee Plan

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HONG KONG—The founder of Chinese Internet giant Alibaba, Ma Yun, shocked the Chinese people by announcing that he wants to move to Hong Kong. Well known for his public support for the Chinese Communist Party (CCP), Ma nonetheless intends to become part of a rush of rich Chinese who are moving themselves and their fortunes out of the mainland.

While meeting with Hong Kong media in the city of Hangzhou in Zhejiang Province, Ma disclosed that he wishes to spend his old age in Hong Kong and could obtain a Hong Kong permanent resident identity card in two years. He added that he likes Hong Kong a lot and has already bought property there.

Ma’s company, Alibaba, is the largest business to business and consumer to consumer e-commerce company in the world. The multi-billion-dollar giant includes various Internet-based businesses, such as online payment services and web portals.

For the past few months, Ma has been planning to seek an initial public offering (IPO) for his company at an exchange outside China, in either New York or Hong Kong.

For a while it seemed likely he would choose New York because the Hong Kong stock exchange refused him, but the stock exchange recently changed its mind, according to a Euromoney article. Various media in mainland China have reported that Ma might re-start low-profile negotiations with Hong Kong.

Ma’s hints about moving himself and his company to Hong Kong have surprised many people, because of his reputation for admiring the Chinese regime.

The most controversial instance of Ma’s praise for the regime occurred in a July 13 South China Morning Post article in which Ma asserted former dictator Deng Xiaoping made the “most correct decision” in ordering what came to be known as the Tiananmen Square massacre. Ma’s spokesperson soon claimed Ma had been misquoted. The Post stands by its article.

Whatever the truth of Ma’s remarks about the massacre, he has regularly boasted of his love for the regime.

Under that regime he has amassed vast profit and world-wide fame. He also has close relationships with high-ranking officials, causing many people to wonder why he wants to leave China.

Officials’ Families

In fact, Ma’s decision to immigrate is not unique. Many of China’s officials and other wealthy people have been immigrating and obtaining passports from Hong Kong as well as foreign countries.

According to statistics from CCP officials, 90 percent of the families of members of the CCP Central Committee –the top 300 or so officials in the Party—have immigrated overseas, Hong Kong’s Trend magazine reported in 2012.

An estimated eight million Chinese people hold dual nationalities since immigrating to foreign countries, keeping their Chinese citizenship to enjoy the welfare and retirement benefits in China, the Standing Committee of the National People’s Congress reported, according to the Feb. 2013 issue of Hong Kong’s Chengming magazine.

During two holidays in 2012, the Mid-Autumn Festival and National Day on Oct. 1, 714 Chinese officials were confirmed to have fled the country, according to a November, 2012 report in Chengming magazine.

Illicit Money

Officials aren’t the only thing leaving China in large quantities. Based on data released by the CCP’s Central Discipline Commission, Japan’s Sankei Newspaper claims the illegal flow of funds out of China is drastically increasing and is expected to reach US$1.5 trillion in 2013.

“The magnitude of illicit money flowing out of China is astonishing,” Raymond Baker, director of the U.S.-based research and advocacy organization Global Financial Integrity (GFI) said in a 2012 report. “There’s no other developing or emerging economy that even comes close to suffering as much in illicit financial outflows.”

“The Chinese economy is a ticking time bomb,” GFI lead economist Dev Kar said in the report. “The social, political, and economic order is not sustainable in the long-run given such massive illicit outflows.”

According to the latest analysis by China Merchants Bank and Bain Capital, one out of three rich men in China has investments overseas, CNN Money reported in May. Such overseas investments have doubled since 2011.

At Risk

Beyond his fondness for Hong Kong, Ma’s decision to move might have been motivated by the recent fates of other wealthy Chinese entrepreneurs.

Li Jun was once one of the richest men in the megapolis of Chongqing, before Bo Xilai’s “smash the black” campaign confiscated his wealth and imprisoned eight of his family members in 2012.

Zeng Chengjie was a successful real estate developer worth billions who got tripped up when the local officials with whom he had worked successfully in Hunan Province were succeeded by others with no connection to Zeng. Zeng was convicted of fraud, his property confiscated, and he was executed on July 12.

This October the wealthy investor Wang Gongquan was arrested, apparently because of his support for a group that promotes developing a civil society in China.

Zong Qinghou, until recently known as China’s richest man, was injured in an attack outside his home in September. While this attack seemed to have nothing to do with from hostility China’s officials, it might nonetheless increase any feeling Ma Jun may have of being unsafe in China.

‘Illogical’

Ma’s disclosure of his immigration plans has led to widespread public discussion on China’s Internet.

“What made him make such a decision?” one netizen commented. “The political system? Environmental issues? The business environment? He might have grudges about all of these.”

“A lot of talented individuals, elites, families of the rich, and officials are also immigrating. They do not want to change their own country; they only think of fleeing to safe places,” another wrote.

“Didn’t he boast of being very ‘patriotic’ and ‘loving the government’? Why is he fleeing? Hong Kong people hold parades to commemorate the June 4 massacre; it doesn’t fit his mentality!” another netizen commented.

“This is illogical!” another wrote. “How could he flee to a place where they despise communism? Might it be that these are really his true inner thoughts?”

Translated by Y.K. Lu. Written in English by Sally Appert.

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