This case study uses Alibaba/Ant Group as an example to show how the meteoric growth of e-commerce and the platform economy in China has transformed the way that business is done and has made Chinese consumers into some of the world’s most active online sellers and purchasers. It focuses especially on the constantly evolving interactions between Alibaba/Ant Group, the Chinese government, and international investors. The case study demonstrates that the expansion of large Chinese corporations within China and overseas, as well as their occasional setbacks, cannot be understood without a broader knowledge of the legal structures underpinning cross-border investment and awareness of multiple competing political interests in China.

The case also gives insights into the multinational links of Chinese e-commerce firms, such as international buyers purchasing Chinese goods online through Taobao and AliExpress, investors buying Alibaba’s shares on the New York Stock Exchange (NYSE), and Alibaba acquiring e-commerce firms overseas, especially in Southeast Asia and developing countries elsewhere.

Finally, the case explains how e-commerce platforms like Alibaba/Ant Group evolved into online banking and financial services. Their huge size and financial complexity have led to systemic risks, and this has caused the Chinese government to regulate these firms more tightly.

This introductory chapter defines the term "corporate ecosystem," explaining why an ecosystem approach is the most suitable way to understand the behavior of Chinese corporations and their interactions with the broader political system in China. The chapter contrasts "corporate ecosystems" with "business ecosystems" and with the narrower, yet more common, corporate governance concerns of many previous accounts discussing Chinese business firms.

This chapter traces the defects of the Chinese corporate-political ecosystem to a combination of lingering Maoist/Communist political practices and a short-term capitalist profit-maximizing mindset that was introduced during the Reform period. The chapter shows the devastating impact of this contradictory ideology on the environment, which has only worsened over the past three decades of reform due to self-interested alliances among local government officials, state-owned enterprises, and private corporations placing economic development and profit-making over the health of their surrounding citizens and natural environment. The result has been a massive ecological and public health crisis and increasing social tensions that threaten the Chinese Communist Party's hold on power.

This concluding chapter suggests a new approach to realigning the corporate-political ecosystem toward an ecologically friendly approach to development. Basing its proposals on a combination of traditional Chinese philosophical principles drawn from Daoism and Confucianism, especially channeling "vital energy" (qi), and contemporary ecological science and behavioral economics, the chapter suggests expanding intraparty democracy within the Chinese Communist Party, altering official incentive systems, and testing a more transparent approach to official entrepreneurialism. Combining these reforms will continue to allow the incredible energy of Chinese people and private firms (not to mention pragmatic and competent government officials) to improve their living standards and quality of life, while channeling that energy in less harmful directions with the aim of preventing ecological and climate change catastrophe.

This chapter moves beyond individual corporations and corporate types to examine the broader sociopolitical system in China. It focuses on the "fragmented authoritarianism" of the Chinese government and the Chinese Communist Party (CCP), outlining the main causes of fragmentation, including corruption, factionalism, autonomy of state-owned enterprises, local government self-interest, private firm co-optation of government actors, and internal contradictions within the CCP's own ideology. This fragmentation prevents the CCP from exercising consistent control over corporations and the broader society, leading to a much more complex and diverse corporate-political ecosystem than imagined by many Western commentators.

This chapter shows that state-owned enterprises (SOEs) still play a major role within the Chinese corporate ecosystem, but even after a long period of reforms, they are still plagued by skewed government incentives leading to irrational investment decisions, huge waste of resources, and widespread defiance of central government regulations. The chapter includes case studies of the coal and power sectors to demonstrate the unholy "tripartite" relationship among SOEs, local government officials, and corrupt central regulators, all engaging in rent-seeking activities in their own vested interests. Current reform programs fail to address these key defects.

This chapter demonstrates that personal relationship networks (guanxi) are still an important element of the Chinese corporate ecosystem, undermining central control through subversive, self-interested informal social structures. Though not as necessary in everyday commercial transactions any more due to the rise of e-commerce and standardized contracts, guanxi is still essential for private firms to gain access to limited natural resources and large-scale finance from state banks during their growth phase and to receive protection from predation by rapacious officials or powerful competitors. The chapter uses the case of Ye Jianming and the CEFC Group to illustrate both the importance of guanxi for private firm development and the risks of collapse when guanxi strays over the line into corruption. The chapter also shows how multinational financial and pharmaceutical firms have attempted to negotiate the narrow path between guanxi and corruption in China, with only limited success.

This chapter follows on from the previous one, evaluating the Chinese Communist Party's recent attempts to transition toward an ecocivilization and to address China's ecological and public health crisis through a new approach toward balanced economic growth. The chapter finds that while the intentions and accompanying legal reforms are admirable, implementation will likely fail due to continuing misalignment between official/corporate incentives (especially at the local level) and central policies, compounded by the fragmented political structure and subversive elements within the corporate-political system that we identified in Chapters 4–7. The chapter also critically analyzes the recent introduction of public interest environmental lawsuits brought by procurators, which, while filling a major gap in legal enforcement against polluters, too often appear to result in opaque settlements with local governments rather than strong penalties against offenders.

This chapter analyzes the major problem of corporate-political corruption in more detail, using case studies of Bo Xilai and the Shide Group ("white gloves"), Zhou Yongkang and CNPC ("protection umbrellas"), and Zhao Zhengyong in Shaanxi Province ("predatory corruption" and "symbiotic parasitism") to illustrate the key types of collusive corruption between officials and corporations and their harmful impacts on Chinese society and politics. At the same time, the chapter introduces the case of Shenzhen's gray property market to show that sometimes a degree of symbiotic corruption is necessary to overcome inflexible and outdated regulations in a rapidly developing economy.

This chapter shows how the Chinese commercial legal system has improved significantly over the past two decades, to the extent that in most cases it compares favorably in dispute resolutions outcomes with legal systems in most liberal democratic nations. However, it falls short of a "rule of law" system in certain types of cases due to three distortions interfering with decision-making by courts: political interference by local and sometimes central government officials; corruption; and guanxi (personal relationships) involving judges or senior court/government officials. The chapter uses the case of Judge Wang Linqing and the Shaanxi Billion Yuan Mining Rights dispute to demonstrate that these distorting elements have infected legal institutions right up to the Supreme People's Court and involve senior Chinese Communist Part leaders within China's anti-corruption agency and Politburo, making the problems very difficult to stamp out.

This chapter traces the incredibly rapid expansion of the platform e-commerce and financial conglomerates Alibaba and Ant Group. It shows how they took advantage of government fragmentation and dependence on the private economy to attract huge foreign investment, using the variable interest entity (VIE) legal loophole, and then to diversify into payment services (Alipay) and finance in conjunction with state financial institutions, attracting hundreds of millions of customers and tens of millions of SME merchants. The chapter analyzes the key struggles between this Alibaba/Ant "corporate ecosystem" and government regulators seeking to protect consumers, finding that reports of a reining in of Chinese private firms by the Chinese Communist Party are premature.

This chapter examines the international controversies surrounding Huawei Technologies, finding that most fears about this private firm are based on misunderstandings of its coevolution within the Chinese business and political environment, as well as unfounded suspicions about its employee ownership structure and alleged Chinese Communist Party control or military links. However, only further reform of the Chinese political ecosystem will help to reduce the international fear and sanctions on the firm.