Jack Ma Yun, the founder of Chinese e-commerce leader Alibaba Group Holding, predicted on Tuesday that the escalating trade conflict between the world's two largest economies could far outlast U.S. President Donald Trump's administration.
"It's going to be long," Ma said at Alibaba's annual investor day in the Chinese city of Hangzhou, referring to the U.S.-China trade war. "It's going to be a mess -- maybe 20 years."
Ma's comments follow the Trump administration's announcement Monday of a new round of U.S. tariffs on Chinese products worth $200 billion. Shares in New York-listed Alibaba were down more than 1.5% in afternoon trading on Tuesday.
The English teacher turned tech entrepreneur said the roots of the conflict run deeper than trade and stem partly from cultural differences.
"It’s not a trade war," Ma said. "It’s about competition between two countries."
Westerners "believe competition [drives] improvement, but Chinese believe in harmonious improvement," he said, so it is "very natural" to expect the conflict to drag on.
"We need new trade rules," said Ma, urging reform of the World Trade Organization.
Ma predicted short-term pain for Chinese and American companies, saying "nobody will benefit" from the tariffs. But looking ahead three to five years, he voiced confidence in China's ability to adapt its economy to the new reality. He did not forget to praise the Belt and Road Initiative, President Xi Jinping's pet infrastructure project, and its prospect of enabling China to diversify its trading partners.
Alibaba -- China's most valuable company, with a market capitalization of more than $400 billion -- has sought to expand its business beyond the country's borders.
"Globalization is our long-term strategy," CEO Daniel Zhang Yong told an earnings conference in August. Zhang will take over as chairman from the outgoing Ma.
But the company's core e-commerce business draws most of its revenue from the vast and still-growing Chinese market, shielding Alibaba from the direct impact of the trade war.
"Alibaba's business is focusing on capturing Chinese domestic consumption opportunities, relying less on Chinese exports," Joseph Tsai, executive vice chairman, said at the earnings briefing. "We believe Chinese policymakers will continue to support imports to China to satisfy the rising demand of Chinese consumers."
Kenji Kawase
