Does China need Alibaba as much as Alibaba needs China? From an economic perspective, the answer might be “yes”. The company is the largest player in China’s online retail sales sector, reaching even remote rural consumers. It is an essential facilitator in the country’s attempt to shift from heavy industry towards services and consumption.
That does not mean that Alibaba is immune to political risk. Hence its $266m purchase of the South China Morning Post, Hong Kong’s most-read English language newspaper. On Wednesday, to broaden the reach of the paper, the SCMP dropped its subscriber paywall. Alibaba hopes to reach more global subscribers, help them to understand China better — and thus, presumably, boost its own appeal.
That may be only part of the story. In promoting a “balanced and fair” perspective on China, it may hope to score points with Beijing. Even for the private sector, such favour has suddenly become more critical. In December, Guo Guangchang, the entrepreneur and chairman of Chinese insurer Fosun, disappeared for a few days to assist authorities with unspecified investigations. Fosun’s shares dropped a tenth as investors realised that private sector scions are not beyond the reach of Party politics.