Beijing wants to make sure that the crackdown on the tech sector is over, but there are still questions about the direction of regulatory policy.

Jack Ma, the founder of Alibaba Group, was Justin Sun's mentor. The most important thing he taught him was how to use shared values to grow a company quickly and manage a growing number of employees.


In a recent interview, Sun, the founder of the global cryptocurrency network Tron, said, "We learned a lot from Alibaba and Jack Ma about how to try to change our business."

Sun, who is 32, and Ma, who is 58, are both Chinese business owners from different generations. But they have both had to deal with rough regulatory waters as the Chinese government has worked for years to limit the power of its tech giants.


The IPO of Ma's Ant Group, which at $37 billion would have been the world's largest, was abruptly canceled by Chinese regulators in November 2020. This was the start of a wide-ranging regulatory crackdown that led to new rules for everything from finance to cybersecurity.


Sun met Ma at the Alibaba founder's top business school in Hangzhou. In 2017, Sun finished his company's initial coin offering (ICO), which raised $70 million, just days before China shut down all local cryptocurrency exchanges and banned ICOs.


Since then, Beijing has tried to reassure companies that it plans to loosen its grip on tech companies as it tries to boost the economy after the "zero-COVID" strategy ended.

In January, Guo Shuqing, a high-ranking central bank official and financial regulator, said that the tech crackdown was "basically" over and that private firms would be encouraged to "come out strong in leading economic growth, creating more jobs, and competing globally."


Around the same time, Beijing put the ride-hailing app Didi back on app stores. This ended 19 months of regulatory purgatory, during which the company paid a $1.2 billion fine and had to leave the New York Stock Exchange after only six months.


But there are still questions about how much the crackdown has hurt the trust of Chinese entrepreneurs and how younger people might want to change the tech industry. There is also doubt about whether or not the crackdown is really over. One of China's best-known investment bankers, Bao Fan, couldn't be reached by his company in February. He joined a long list of prominent Chinese businessmen who seem to have vanished into China's confusing legal system.


Sun didn't want to talk directly about Beijing's crackdown and what he thought about policy changes, but he runs his business out of Singapore, like a growing number of Chinese entrepreneurs. He also gave up his Chinese citizenship to get a passport from Grenada, which he says makes it easier for him to travel around the world. In 2019, the Chinese business magazine Caixin said that Sun was being investigated by Chinese authorities and that he was not allowed to leave the country. Sun has denied that these reports are true.

Sun, who was Grenada's official representative at the World Trade Organization, said, "I've always wanted to be a global citizen" (WTO).


"That's why I've been to 100 countries in the world in the last 10 years. I also think the success of cryptocurrencies has something to do with the spread of globalization."


Sun thinks that his generation and Ma's generation are different because they work in different fields: The older generation was successful in fields like e-commerce, real estate, and finance. Sun's peers, on the other hand, are focusing on newer fields like AI learning and cryptocurrencies. Sun said that these newer fields have more room for growth than the areas that Ma's generation worked on, which are already mature.

"Real estate, e-commerce, and other traditional industries are full of competition, and they have reached the end of their growth potential," he said. "But I think the potential for blockchain and AI is now unlimited."


The US Securities and Exchange Commission charged Sun and three of his companies with civil fraud and market manipulation last week. Eight famous people, like actress Lindsay Lohan and rapper Akon, were charged with promoting Sun's cryptocurrencies without saying they were paid to do so.


When asked about the case, Sun's publicist pointed people to a tweet where the crypto entrepreneur said the charges "lacked merit" and that the SEC's framework for crypto was not well-developed.

Beijing's attempts to put the tech crackdown in the past seem to be part of a larger effort to boost the economy, which grew by only 3% last year, the second-lowest rate in almost 50 years. During China's annual parliamentary session last month, Li Qiang, the former party boss of the financial powerhouse Shanghai, was named the new premier and the top economic team was reorganized.


Last week, Li spoke at China's answer to Davos. He wanted to reassure foreign business leaders, like Apple's CEO Tim Cook, that the country would continue to open up.

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Ma, who is said to have lived in Japan since last year, made an appearance in the eastern Chinese city of Hangzhou on the same day. There, he went to a school he helped start and gave a speech about how important AI is.


Karman Lucero, a fellow at Yale University's Paul Tsai China Center, said that the "old guard" of business leaders at tech giants like Alibaba, Baidu, and Tencent are "probably gone, or at least much less influential than they used to be." He also said that the culture they built, which was heavily influenced by Silicon Valley, is "probably gone, or at least much less influential than it used to be."



"The most important question is what [the new entrepreneurs] are going to build instead, and will it be successful in the way they want?" Al Jazeera was told by Lucero.


Experts and businesspeople say it's too early to tell where China's tech scene will go after the crackdown, but there are some hints.


Beijing has made it clear many times that it wants companies to focus on sectors that are important to the country, like semiconductors, artificial intelligence, and advanced manufacturing. This is because competition and tensions with the US are getting worse.


At the same time, officials have said that they don't like the "platform economy," which is made up of well-known tech fields like social media, e-commerce, and gaming.


Pony Ma, the founder of Tencent, was missing from the list of delegates at the parliamentary session earlier this month. Also, Robin Li, the head of search giant Baidu, William Lei Ding, the founder of gaming group NetEase, and Wang Xiaochuan, the head of online portal Sogou, were not on a list of the government's top advisers.

Instead, the list of delegates was full of people from AI and semiconductor companies, like Zhang Suxin, who is the chair of chipmaker Hua Hong Semiconductor, and Liu Qingfeng, who is the chair of AI company iFlytek.


Joerg Wuttke, president of the European Union Chamber of Commerce in China, said that the trend shown by Sun, Ma, and other Chinese business owners who are moving their assets, businesses, and families abroad is worrying for the "economic fiber" of China.


Wuttke told Al Jazeera, "These are the guys who have moved China forward in the last 10–20 years." "[The crackdown] was a huge setback for Chinese entrepreneurs, and there is still a lot to do to win back the trust of these people."


Still, Chinese entrepreneurs who move abroad don't always have a smooth ride either.


Rui Ma, an investor and adviser to tech companies in California, says that the Chinese tech entrepreneurs she works with in the US often worry about being treated unfairly and mistrusted because of their nationality. This is because relations between Beijing and Washington are getting more and more tense.


She told Al Jazeera, "They feel very strongly pressured not by Chinese policy but by international policy, and they are afraid they can't do business on international markets because they are judged unfairly because of who they are."


Lucero said that Beijing also wants tech companies to "be better social actors" and work in new fields.

"That means they need to treat their workers better, be more open about how they handle their customers' data, and do a better job of censoring information and controlling content that the party might not like."


Wang Huiyao, president of the Center for China and Globalization, a think tank in Beijing, said that "compliance" is the key word, not "crackdown." Wang told Al Jazeera, "The tech giants need to make some changes to match the new reality."


Wang said that from a political, big-picture point of view, Beijing wants its tech leaders to follow the rules and back the government's plan for "high quality, balanced growth" in the coming decades.


President Xi Jinping's campaign for "common prosperity" is a big part of this. Its goal is to keep the wealth gap as small as possible, even though some people say related policies hurt innovation.


Huang Weiping, a professor of economics at Renmin University, was very clear about what people should expect from the industry.


Huang told Al Jazeera, "If you dance to the main tune, there will be no problem. On the other hand, if you don't dance to the main tune, there will be a problem."


Huang said, "Let me say this much." "The era did not start with Jack Ma. It was the time when Jack Ma was born.

SOURCE: NEWS AGENCIES