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Jack Ma, China's richest man, appears to have finely tuned political antennae. So too does Zhang Yimou, China's most celebrated movie director. The two men likely understand as well as anyone the limits on both entrepreneurial and artistic freedom in today's China.
Yet each in their own way took a risk when they pushed the envelope with powerful regulators who control their industries. As it turns out, both have paid a heavy price. The treatment they've received illustrates not just the perils of appearing to cross Beijing, speaking one's mind and challenging orthodoxy. It raises questions about the future of innovation at a critical moment, one where China is counting on internal dynamism rather than external demand to drive its economy. More broadly, it touches upon China's place in the world. Can it ever compete with the West in the realm of "soft power," which is so necessary to global influence?  Jack Ma Photographer: Bloomberg This week in the New Economy
A few days ago, Ma publicly lashed out at financial regulators who he said were stymying innovation in the industry and stunting the dreams of young people. The banks they oversee, he raged, suffered from a "pawnshop mentality."
Ma may have had a point: The Ant Group, his fintech startup, has thrived precisely because banks have done such a poor job supplying loans to Chinese consumers and small enterprise. Nevertheless, his act of rebellion derailed what would have been his crowning achievement—Ant's listing in Hong Kong and Shanghai as the world's largest IPO. In the process, he suffered a humiliating dressing down by regulators at home and embarrassment abroad. Zhang's story is similar in key respects. In February of last year, he was preparing to unveil his masterpiece, "One Second," at the Berlin International Film Festival. Set during the Cultural Revolution, it was a deeply personal work, and according to the Hollywood Reporter, one he'd been wanting to make for nearly a decade. The movie was widely expected to win a Golden Bear award and pick up trophies in Cannes and elsewhere. But two days before the Berlin festival opened, Zhang's production company pulled the movie for "technical reasons."  Zhang Yimou Photographer: Gilles Sabrie/Bloomberg The international media concluded Zhang had been censored. He, like Ma, was attempting to address an critical national issue: China has never allowed for a transparent historical reckoning of the Cultural Revolution, perhaps the darkest chapter in its modern history, and Zhang's movie represented a cautious move in that direction. Just as Beijing seemed to clamp down on Zhang's accolades, it also blocked Ma from adding another $27 billion to his fortune. The public listing, Ma said, would correct a flaw at the heart of China's financial economy. It was "a sad, sad day for China," writes Shuli Ren in Bloomberg Opinion. "China lost a golden investment opportunity by shooting itself in the foot." Ren points out the unfortunate timing: the listing debacle occurred at a time when Beijing's Covid-19 containment strategy is working, its economy is bouncing back and foreigners are flooding into its bond market. China is keen to promote both Hong Kong and Shanghai as listing alternatives to the U.S. and other international markets. Both Ma and Zhang are transcendent figures, and thus their punishment carries great symbolic weight. After all, Ma pioneered China's e-commerce industry and Zhang is adored by domestic film audiences. Arguably, no two private individuals have done more to enhance China's international image. Zhang orchestrated the opening and closing ceremonies at the 2008 Beijing Olympics, China's coming-of-age party. Ma is working on a vision to bring hundreds of thousands of small business owners in developing markets into the digital economy.  Fireworks explode over the Bird's Nest stadium during the opening ceremony of the 2008 Beijing Olympics. Photographer: Nelson Ching They epitomize the creative energies China needs to build a future as a technology superpower and compete against the industrialized West. Yet, instead of looking forward to new triumphs, Zhang has spent months recutting "One Second." The film will eventually appear, but reportedly with a new—and unlikely—happy ending. Ma's IPO will likely also return, although to meet new regulation Ant will have to look more like a staid bank than a go-go fintech sensation. It will probably be worth far less, too. Both Ma and Zhang have been diminished. But in a week when President Xi Jinping announced that doubling the size of China's economy by 2035 is "completely possible," their stories raise important questions that will directly affect the country's ability to meet that goal. China needs its brightest stars to shine. The world's most influential leaders will be there. Will you? Click here to join Bloomberg New Economy Forum for a virtual Global Town Hall on Nov. 16-19 and be part of change in real time. __________________________________________________________ Like Turning Points? Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. Emerging Equities: Asia's emerging markets face a complicated outlook—when will recovery begin? Will China's recovery kick-start regional growth? What will be the impact of the U.S. election and Fed policy? Join us virtually on Nov. 18 at 1 p.m. Singapore time (GMT+8) as leading Asia investors gather to answer these questions and more. Register for free here to be part of this live, interactive conversation, or to access all content on-demand at your convenience. Download the Bloomberg app: It's available for iOS and Android. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
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