A thousand-year-old poem has just cost Chinese delivery giant Meituan tens of billions of dollars in market value, rattling an already tense tech industry. Last Thursday, Meituan founder and CEO Wang Xing posted a poem from the Tang dynasty on social media, igniting a firestorm.
Wang’s original post on Fanfou has since been removed. However, Meituan confirmed that it contained the poem “The Book Burning Pit,” written more than 1,100 years ago by Chinese poet Zhang Jie to satirize Qin Shi Huang, who declared himself the first “emperor” of a unified China in 221 BC.
According to official Chinese historical records, Qin suppressed dissent by digging huge pits, burning books that were not approved by his government, and burying scholars to discourage people from criticizing his rule.
“It’s just wishful thinking that Qin Shi Huang expects to rely on force to keep his and his descendants’ rule over China forever,” the poem begins. “The ashes in the pits have not yet become cold. However, riots have already broken out in Shandong “It goes on to mention a major seat of power at the time.
Some on Chinese social media speculated that Wang posted the poem as a veiled jab at the government, which is currently restraining some of the country’s most powerful tech companies. Others compared the post to a speech given late last year by Alibaba co-founder Jack Ma, in which he criticized China’s traditional, state-controlled banks for having a “pawn shop” mentality and financial regulators for using outdated methods. Ma’s speech appeared to irritate Beijing officials, and a world record IPO for Alibaba affiliate Ant Group was canceled at the last minute.
Meituan and others, including Alibaba and Tencent, have all faced fines or been investigated and scrutinized in recent months as part of the crackdown on antitrust or consumer rights concerns.
And the squabble over the poem has highlighted the precarious position in which Chinese tech companies like Meituan find themselves. From Thursday to Tuesday, the company’s stock fell 13%, wiping out nearly $30 billion in market value. Wang later clarified in another post on Sunday that he was referring to Meituan’s industry competitors, according to Meituan.
“A poem from the Tang dynasty has made me sigh a lot these days,” he wrote in the second post. “The Qin dynasty was wary of scholars, but Liu Bang and Xiang Yu, whose rebellions overthrew the Qin dynasty, didn’t read. This reminds me that the most dangerous opponents are usually not the ones that you have expected.”
“Alibaba has focused on JD.com all these years, but in the end, it was Pinduoduo that suddenly turned up, with its number of users surpassing [Alibaba-owned] Taobao’s in one fell swoop,” he added, referring to China’s largest e-commerce websites. Wang wrote that his own industry, food delivery, may be disrupted by companies or business models “that we haven’t paid attention to.”
Meituan and dozens of other companies were warned in April to learn from Alibaba’s record $2.8 billion fine, which antitrust regulators imposed after concluding that the online shopping giant had acted monopolistically. The regulators warned the companies that if they did not address any monopolistic behavior, they would face “severe penalties.”
The State Administration of Market Regulation of China later launched an anti-trust investigation into Meituan, stating that it was looking into “exclusive dealing agreements.” According to the Shanghai Consumer Council, the company has since been summoned by various regulators, including on Monday, when it was summoned to speak with industry watchdogs in Shanghai about consumer rights.
Fitch Ratings analysts wrote last month in a report that the regulatory risk for the internet sector was “likely to remain elevated.” After what happened to Alibaba, the ratings agency stated that it “could not rule out fines for other companies.”
“The poem is powerful, and Wang Xing posted it at a critical juncture in the big tech crackdown. This is an inappropriate act, to say the least “Earlier this week, someone posted on the Twitter-like website Weibo. “Wang most likely meant his competitors. However, it appears that investors do not see it that way. This is a critical juncture.”