The Interconnected Fates of Jack Ma and Xiao Jianhua in China’s Business Landscape

The Rise and Fall of Chinese Business Titans

Four years ago, Jack Ma stood as a symbol of China’s remarkable economic ascent. As the nation’s wealthiest and most recognizable entrepreneur, he was on the verge of becoming one of the richest individuals globally. The anticipated initial public offering of Mr. Ma’s fintech enterprise, Ant Group, was projected to shatter records, eclipsing even the monumental launch of his e-commerce behemoth, Alibaba. It was widely believed that he would soon be celebrated alongside icons like Bill Gates and Steve Jobs — a beacon of Western-style entrepreneurship within China.

In stark contrast, another affluent Chinese businessman was facing a very different destiny. Xiao Jianhua was detained under allegations of bribery and corruption, becoming a high-profile target in the government’s extensive anti-graft campaign. Mr. Xiao had built his wealth through market manipulation and by fostering close relationships with the families of top Chinese officials, and he was about to be made an emblematic case of accountability.

Yet, behind the scenes, these two contrasting figures of China’s unpredictable capitalism — its most lauded and its most infamous billionaires — were connected through investments exceeding $1 billion, as uncovered by an investigation conducted by The New York Times in collaboration with The Wire China.

A meticulous analysis of over 2,000 confidential documents reveals that Mr. Xiao’s now-defunct Tomorrow Group secretly acquired lucrative stakes in a variety of Mr. Ma’s businesses over a span of five years. These financial entanglements were never publicly disclosed, and a former senior executive from Tomorrow Group stated, “As far as we know, Jack Ma was unaware” of these dealings.

These transactions provide an insightful glimpse into China’s unique brand of capitalism, where entrepreneurs with strong connections, along with those who fund them, often find it more advantageous to maintain a distance from one another. In nearly any other thriving economy, one would expect the owner of a significant enterprise to seek a relationship with an investor capable of raising $1 billion, while the investor would typically desire some level of influence over the allocation of those funds.