The Chinese Communist Party ordered billionaire Wang Xing, CEO of the country’s third-largest tech company Meituan, to stay out of the public eye after losing over $2.5 billion in a single month, anonymous sources told Bloomberg on Friday.
The origin of Wang’s problems was reportedly his decision to publish a 28-character social media post quoting an 1,100-year-old poem suspected to have insulted dictator Xi Jinping.
According to anonymous people speaking to Bloomberg, Beijing summoned Wang to a meeting and ordered him to “keep a low profile” and “refrain from courting the spotlight.” Wang has not been seen in public since Meituan’s last quarterly earnings call in May.
Those sources said authorities told Wang he would not face further punishment if he keeps quiet until the controversy blows over. The Communist Party is reportedly reluctant to come down on the CEO more harshly because it does not wish to appear thin-skinned and insecure ahead of the Party’s upcoming 100th-anniversary celebration on July 1.
Wang, 42, was educated in both China and the United States, where he earned a master’s degree in computer engineering from the University of Delaware in 2005. He gave up on his PhD program and teamed up with some friends from school to establish a few unsuccessful social media sites before hitting paydirt with a Twitter-style microblogging platform called Fanfou in 2007, and then Meituan in 2010.
Meituan is a discount shopping service similar to Groupon. It merged with a similar website called Dianping in 2015 and became an ubiquitous group-buying juggernaut, selling everything from food to ride-sharing services, and even bicycle–sharing services.
“There’s a saying among Chinese millennials that Meituan is even more convenient than mum’s kitchen, a joke born from how often China’s young people order their food from Meituan,” the South China Morning Post (SCMP) observed.
Wang has long been admired as a shining example of the self-made Chinese titan, a nerdy engineer who learned from a few costly mistakes to develop a net worth of over $20 billion in the span of a decade. Meituan is now valued at over $220 billion.
That all came to an abrupt halt last month, when he indulged one of his other passions, classical literature. On May 6, Wang wrote a very brief post on the Fanfou platform he created – which is still operational but a relatively small corner of Chinese social media – in which he quoted a poem dating back to the Tang dynasty, a golden age of Chinese culture that lasted from the 7th to 10th centuries A.D.
The poem is entitled “The Book Burning Pit,” written by a poet named Zhang Jie to lampoon an overweening would-be emperor named Qin Shi Huang who ambitiously declared himself ruler of all China in 221 B.C. Qin Shi Huang, China’s first emperor, had a habit of digging huge fire pits and burning every book his regime disapproved of, sometimes along with their authors.
The quote Wang posted on Fanfou required only 28 Chinese characters. Translated into English, the poem reads:
The Qin Dynasty is ruined with the burning of bamboos and fabrics.
The Hangu Pass and the Yellow River guarded the residence of the ancestor of the Chinese dragon in vain.
Before the ashes in the burning pit turned cold, a riot had already started in Shandong Province.
It turned out that Liu Bang and Xiang Yu were both uneducated people.
The poem suggests the arrogant emperor decided to prove he was smarter than wise scholars by murdering them and burning their books. This strategy proved unsuccessful in the long run, as Qin suffered several assassination attempts, lived his final days in constant paranoia, died before he was 50 years old, and was not long survived by the shaky empire he had built.
This did not sit well with modern-day tyrant Xi Jinping and his cult of personality, which immediately assumed Wang was mocking Xi by quoting 1,100-year-old poet Zhang Jie’s scathing satire of 2,200-year-old book barbecuing Qin Shi Huang.
Wang deleted his post three days after he wrote it, explaining that his intention was to remind himself and his industry peers not to ignore or underestimate potential competitors, not make a political statement about communism:
A poem from the Tang dynasty inspired me a lot lately: the Qin dynasty was afraid of scholars but Liu Bang and Xiang Yu, whose uprising overthrew the Qin regime, didn’t have much education. This has reminded me that the most dangerous competitors are often not those expected. Alibaba has been focusing on JD.com these years, only to see Pinduoduo exceed it in user numbers. Similarly, Ele.me looks to be the biggest rival of Meituan’s delivery business, but what could really cause a shock to the industry may be some companies and business models that haven’t come under our radar
Wang wrote his controversial poetry-quoting post in the midst of a massive Communist Party regulatory crackdown on high-flying tech entrepreneurs, which began after titanic Alibaba’s founder Jack Ma dared to criticize the blinkered Communist regulatory state at a public forum in October 2020.
Ma lost billions of dollars and “disappeared” for a while, eventually resurfacing as a chastised shadow of his formerly flamboyant self. The Communist Party began a regulatory jihad against other massive tech companies, teaching a very thorough lesson to Chinese billionaires that all of them serve the Communist Party and any of them can be destroyed for stepping out of line.
Wang’s tormentors allegedly accused him of trying to undermine Communist Party regulators investigating his own company. They were likewise skeptical when Wang transferred $2.3 billion of his Meituan shares to his charitable foundation in early June, accusing him of trying to hide his assets from regulators, and perhaps buy some goodwill from the public and Party as his troubles mounted.
Among other things, Meituan has been scrutinized by regulators and Chinese state media for anti-competitive practices and for abusing its delivery drivers when food deliveries exploded during the pandemic.
Investors grew nervous that Wang might be courting Ma’s fate, pushing Meituan stock into free fall. Market analysts directly compared Wang’s poetry post to the speech in October that got Jack Ma in so much trouble.
“At this crucial timing of the antitrust investigation, it is indeed inappropriate for Wang to post that poem, which could stir too many thoughts from people,” asserted rival tycoon Ge Long.
“Although Wang’s original meaning is to comment on competition in the tech industry, such obscure writing could lead investors to tremble with fright,” Ge said.
A good $16 billion of Meituan’s market cap evaporated by the end of the first business day after Wang posted and deleted the poem. Losses reached $30 billion after a few more days, although the stock rebounded as the controversy settled down and investors concluded Meituan would not be punished too harshly for Wang’s alleged transgression.
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