Days after the US announced its plans to levy fresh tariffs on $US200 billion of Chinese goods, one of China’s richest men warned of the repercussions claiming tensions could last as long as 20 years, harming both nations.
At an annual investor conference in Hangzhou, China, Jack Ma, the founder and executive chairman of Alibaba told China’s business and political leaders that the country’s trade war with the US could last longer and be more crippling than originally expected.
“Short-term business communities in China, the US and Europe will all be in trouble,” he said. Ma also cautioned that tensions could last two decades. “If you want a short-term solution, there is no solution.”
However, Ma did have suggestions on how Alibaba and the Chinese economy could prepare for any long-term fallout. According to his speech, he believes China needs to stop focusing on US trade relations and instead start shifting its attention to emerging regions like Southeast Asia and Africa.
In light of rising tensions between two of the world’s powerhouses, Ma has already decided to ditch his previous promise to US President, Donald Trump to create one million US jobs.
“This commitment is based on friendly China-US cooperation and the rational and objective premise of bilateral trade,” Ma said.
“The current situation has already destroyed the original premise. There is no way to deliver the promise.”
Alibaba’s business is threatened by the US’ plans to impose fresh tariffs, as its wholesale branch allows American merchants to source goods from China. Because of this, he says carefully planned strategies that look beyond the interim will be needed.
“We should not focus on this quarter or next quarter or next year’s profit… If Alibaba cannot sustain and grow, no company in China can grow. I’m 100 percent confident in that.”
If, however, the business can withstand the fallout from US/Chinese relations, Ma says the current situation could be “a huge opportunity”, for companies that are smart enough to take advantage of any damage in US and Chinese relations, and new opportunities with other nations.
Alibaba has already been hit by the announcement of $US200 billion in fresh tariffs as its shares, which trade in the US, dropped after Tuesday’s announcement. This resulted in a year-to-date decline of approximately nine percent. Despite this, Ma is confident in Alibaba’s resilience and believes the company’s CEO, Daniel Zhang will be well positioned to lead Alibaba into the future when he takes the helm as chairman of the board in 12-months time.
“When problems come, learn how to hide, learn how to train,” Ma said. “I believe Daniel and his team will have the wisdom to fight for the future.”
Ma will be stepping down from his current role with Alibaba on the company’s 20th anniversary next year, naming Zhang as his successor last week. The now CEO has been busy bolstering Alibaba’s e-commerce ambitions in the new retail sphere, which Alibaba’s Chief Financial Officer, Maggie Wu says will help sustain revenue growth.
“That kind of growth will likely help Alibaba outpace its global peers,” she said when announcing a predicted revenue growth of 60 percent by the end of the financial year, ending in March.
According to Wu, Alibaba is well positioned to outpace its global peers.
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