Jack Ma is back. The Chinese billionaire’s re-emergence in a video after a three-month absence reassured investors concerned over his fate and prompted a rally in the shares of Alibaba, the ecommerce group he founded.

The relief over his reappearance this week was shortlived, however. Hours later, the People’s Bank of China proposed new anti-monopoly rules that will primarily hurt Alibaba’s payments affiliate, Ant Group. On Thursday, Alibaba’s Hong Kong-traded shares fell nearly 3 per cent.

Mr Ma had not been seen publicly since October 24 when he criticised Chinese financial regulators at a forum in Shanghai. Ten days later authorities cancelled Ant’s $37bn stock market debut, which would have been the world’s largest.

As well as sparking a sharp sell-off in Alibaba’s shares, the episode has stripped Mr Ma of his status as China’s richest man. His net worth has fallen by more than 10 per cent to $54.5bn, according to Bloomberg data.

While his brief reappearance on Wednesday suggests that Mr Ma is not facing legal jeopardy himself — or at least not yet — the new central bank rules remind investors that the regulatory assault on his two flagship companies is steaming ahead.

“It showed that it’s life as normal [for Mr Ma] but not business as normal,” said Rupert Hoogewerf, whose Hurun Report has been chronicling the rise of China’s billionaire class for more than 20 years. Friends of Mr Ma added that he had been spending time in China’s southern island province of Hainan, while he had also been seen in Hangzhou, where Ant and Alibaba are based.

The draft rules issued by the PBoC, which have not yet been enacted, make it clear that regulators are now targeting Ant’s core Alipay payments service as a monopoly that might have to be broken up. The central bank had previously suggested that it might be content if Ant “returned to its roots” as a payments provider, while placing its fast-growing lending businesses into a new holding vehicle that would face more stringent oversight.

China’s market regulator launched a separate anti-monopoly investigation into Alibaba on December 24 that is likely to focus on the group’s relationship with merchants using its ecommerce platforms, but it has not said that Ant is also in its crosshairs.

Line chart of Share price (HK$) showing Alibaba Group hit by crackdown

Under the PBoC’s new rules, it can advise the State Administration of Market Regulation to break up any “non-bank payment company” that controls more than half of the market — or any two with a combined market share of more than 67 per cent. The latter provision suggests that internet group Tencent’s WeChat Pay, China’s second-largest payments service after Alipay, could also be targeted.

Chinese antitrust experts said that it was highly unusual for the PBoC to include anti-monopoly provisions in its rules and that Wednesday’s development was a clear warning to Ant and Tencent. Alipay and WeChat Pay are estimated to control about 55 per cent and 40 per cent of China’s mobile payments sector, respectively, according to Shanghai-based consultancy iResearch.

The PBoC “is stepping into someone else’s territory to state what a monopoly is — it signals they are strengthening their control”, said Angela Zhang, an antitrust expert and head of the Centre for Chinese Law at the University of Hong Kong. “Both Ant and Tencent have a strong market position in payments — I imagine they will be quite nervous about this.”

A Chinese antitrust lawyer, who asked not to be identified, added that the new rules “indicate Ant could be torn apart”.

China’s third-party mobile payments market

The tone of Mr Ma’s comments in the Wednesday video appeared far more humble than his last public appearance in October. The clip focused on his charitable foundation’s support of rural education, dovetailing perfectly with President Xi Jinping’s long-running campaign to eradicate poverty in the world’s most populous country.

“My colleagues and I have been studying and thinking, and we have become more determined to devote ourselves to education and public welfare,” he said in the video posted on a news outlet controlled by government of the province where Alibaba is based.

When he criticised China’s regulators nearly three months ago, Mr Ma insisted he was speaking as “a non-professional not carrying any official titles”. The Alibaba founder, who turns 57 this year, officially retired in 2019.

But he subsequently contradicted an earlier speech at the same forum by Wang Qishan, China’s powerful vice-president and former anti-corruption tsar, who had emphasised the importance of financial stability over innovation. Not only did Mr Ma preach the opposite, he made it clear he felt a personal duty to do so.

“People like me have an inescapable responsibility to think about the future,” Mr Ma told the crowd of regulators. “We have come to a most crucial juncture . . . the race of tomorrow will be a race of innovation, not regulatory capabilities.”

A senior executive at one of China’s largest state lenders said financial institutions, such as his and government-owned payments processor China UnionPay, would benefit from the crackdown on Ant and Tencent. “It’s a boon for our credit card business,” he said, noting that credit cards’ share of China’s overall payments market was increasing. “We expect the trend to continue this year.”

But the executive added that the PBoC would have to tread carefully as it brings Mr Ma’s empire to heel. “Ant and Tencent’s payment services have become a daily necessity for the Chinese public,” he said.