Communist Mole

Jack Ma, China’s Richest Man, Belongs to the Communist Party. Of Course.
By Li Yuan

Jack Ma, China’s richest man and co-founder of the e-commerce giant Alibaba, in Shanghai this month. He was identified as a member of the Chinese Communist Party by its official newspaper.
HONG KONG — Jack Ma, China’s richest man and the guiding force behind its biggest e-commerce company, belongs to an elite club of power brokers, 89 million strong: the Chinese Communist Party.
The party’s official People’s Daily newspaper included Ma, executive chairman of the Alibaba Group and the country’s most prominent capitalist, in a list it published on Monday of 100 Chinese people who had made extraordinary contributions to the country’s development over the last 40 years. 

The entry for Ma identified him as a party member.
It may sound contradictory that the wealthy Ma belongs to an organization that got its start calling for the empowerment of the proletariat. 

But Ma’s political affiliation came as no surprise to many Chinese and China watchers. 

Though it still publicly extols the principles of Karl Marx, the Chinese Communist Party largely abandoned collectivist doctrine in the post-Mao era, freeing private entrepreneurs to help build the world’s second-largest economy after the United States.
In fact, the disclosure reveals a party that is eager to prove its legitimacy by affiliating itself with capitalist success stories. 

Ma is a tech rock star in China, and his membership in the party could prod others to follow his lead.
“Even Jack Ma is a party member,” said Kellee Tsai, dean of humanities and social science at the Hong Kong University of Science and Technology, referring to the party’s pitch. 

“Doesn’t it make you want to join the party, too?”
Alibaba declined to comment on the matter. 

The Hurun Report, a research organization in Shanghai that tracks the wealthy in China, estimates Ma and his family’s net worth at 270 billion renminbi, or $39 billion.

Today’s party isn’t exactly exclusive. 

Its members represent nearly 7 percent of China’s population. 

Its ranks include government officials, businesspeople and even dissidents. 

Being a member often suggests a desire to network and get ahead rather than express one’s political views.
For businesspeople in particular, membership is more often a matter of expediency. 

Party membership provides a layer of protection in a country where private ownership protections are often haphazardly enforced or ignored entirely.
Though its constitution still describes members as “vanguard fighters of the Chinese working class imbued with communist consciousness,” the party has veered away from its communist roots and welcomed private entrepreneurs since 2001. 

Some of the richest men in China are party members, including Wang Jianlin of the Dalian Wanda Group, a property and entertainment conglomerate, and Xu Jiayin of the Evergrande Group, a property developer.
It is unclear when Ma joined the party or how much he pays in dues. 

The party sets dues at 2 percent of monthly salary for higher-income members.
The star power of the Chinese entrepreneur class has dimmed since Xi Jinping became the country’s top leader in 2012. 

Under Xi, the Communist Party plays a bigger role in not only Chinese politics but also the economy and everyday life. 

Any entity with more than three party members is required to set up a party cell. 

Some three-quarters of private enterprises, or 1.9 million, had done so in 2017, according to official data.
Companies say they face much greater pressure to set up the cells than in the past. 

Even some of the coolest start-ups in tech-savvy Beijing have designated party-building spaces.
The disclosure of Ma’s membership reflects the thinking that the party controls the economy and society, said Guo Yuhua, a sociology professor at Tsinghua University in Beijing and a critic of the party.
“It’s going backward from the Deng Xiaoping era, when the party advocated the separation of the party and the government,” she said, referring to the party leader who ultimately governed China during its early years of reform in the 1970s and ’80s.
The disclosure also drew attention because Ma had in the past tried to keep his distance from the government. 

But as Xi tightens ideological controls and the power of the state grows, many successful entrepreneurs have made a point of showing their party loyalty.
Ma visited Yan’an, the city often considered the birthplace of the Chinese Communist Revolution, in 2015, according to the Chinese news media. 

Pony Ma, who is chief executive of the internet giant Tencent Holdings, showed up in Yan’an as well this year, wearing a Red Army uniform. 

Yan’an is also where Xi spent much of his teenage years.
In recent weeks, amid signs of a slowing economy and an intensifying trade war with the United States, China’s leaders have taken a softer tone toward private enterprise, making supportive remarks and promising tax cuts.
Making it clear that Ma, the most successful businessman in China, is a member could strengthen the party’s legitimacy.
“Above all,” said Tsai of the Hong Kong University of Science and Technology, “the party is quite open about the fact that it wants to survive.”

Chinese Peril

Trump Blocks China Bid to Buy U.S. Chip Maker
By ANA SWANSON

Lattice Semiconductor offices in San Jose, Calif., in 2007. President Trump prevented the acquisition of Lattice by an investor group with ties to Beijing.

President Trump on Wednesday blocked a China-backed investor from buying an American semiconductor maker over national security concerns, a rare move that could signal more aggressive scrutiny of China’s deal-making ambitions.
The deal for Lattice Semiconductor has provided a test of the president’s economic and diplomatic relationship with China.
On the campaign trail, Mr. Trump reserved some of his harshest words for China, accusing the country of stealing jobs. 

In recent months, the president has turned more critical of Beijing, accusing it of failing to do more to restrain the nuclear ambitions of North Korea.
Derek M. Scissors, a resident scholar at the American Enterprise Institute who studies Chinese investment, said that the administration’s decision over Lattice was intended to send a political message. 

“We could let it die quietly,” he said, “but we’re going to kill it loudly.”
The White House said on Wednesday that it prevented the acquisition of Lattice Semiconductor, in part because the United States government relies on the company’s products. 

The integrity of the semiconductor industry, it said, was vital.
The White House also raised concerns over the buyer’s close ties to Beijing. 

The investment group included China Venture Capital Fund Corporation, which is owned by state-backed entities, the White House said.
The decision could foretell trouble for other Chinese deals under review by the Committee on Foreign Investment in the United States, a multiagency group that examines takeovers of American companies by foreign buyers and makes recommendations to the president. 

The group, which operates largely in secrecy, is also looking at the proposed purchase of MoneyGram International by Ant Financial, an affiliate of the Chinese technology giant Alibaba Group.
Chinese deal-making in the United States has surged in recent years, as cash-rich companies look overseas to diversify and spread their wealth. 

Last year, Chinese investment hit $46 billion, a threefold increase from 2015 before, according to the research firm Rhodium Group.
The flow of Chinese money into the country, although it has slowed lately, has prompted concerns over the state’s influence in corporate strategy. 

Critics are particularly worried that China is focusing on sensitive industries, like technology. 

White House officials and lawmakers on both sides of the aisle are pushing for new rules that would keep closer tabs on deals by China, by expanding the powers of the foreign investment committee, known as Cfius.
Mr. Trump has sought to take a tough line on China’s trade and investment practices, threatening on the campaign trail to enact sweeping tariffs. 

In August, the White House began an investigation into Chinese violations of American intellectual property, an inquiry that could result in tariffs or another negotiated outcome. 

Mr. Trump also called for a report on the steel industry, where China is dominant.
By blocking the deal for Lattice Semiconductor, the president is taking direct aim at China’s industrial policy.
As China looks to expand its global reach and support its economic growth, the government wants to be a dominant force in cutting-edge industries. 

The country’s “Made in China 2025” program, which will provide extensive assistance and cheap loans to certain industries, lays out an ambitious plan to build homegrown giants that will compete with American stalwarts.
Semiconductors has been a major focus of the effort. 

As China moves to build and design chips, Chinese investors has acquired overseas chip makers and teamed up with Western technology giants.
The deal for Lattice Semiconductor played to those ambitions.
The company announced an agreement last November to sell itself to a private equity firm, Canyon Bridge Capital Partners, for $1.3 billion. 

The initial funding for the firm, based in Palo Alto, Calif., came from China.
Cfius raised warning flags about the deal. 

Although the review process takes place behind closed doors, Lattice disclosed on Sept. 1 that the committee planned to recommend that the president to block the deal.
When that happens, companies usually drop their acquisition plans. 

Last year, Philips, the Dutch electronics giant, called off a deal to sell a big stake in its automotive and LED components business over Cfius concerns. 

The buyer was a consortium with GO Scale Capital, an investment fund sponsored, in part, by GSR Ventures of China.
Lattice instead tried to appeal to the president. 

In a filing, the company said it would offer measures to resolve any outstanding national security concerns.
The administration was not convinced. 

Treasury Secretary Steven Mnuchin, the chairman of the review committee, said in a statement on Wednesday that its recommendation on the deal was “consistent with the administration’s commitment to take all actions necessary to protect national security.”
“Cfius and the president assess that the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation,” Mr. Mnuchin said.