‘Vexing Issues’ in US-China Trade Talks ‘Will Resolve Themselves,’ Alibaba Exec Says
The U.S.-China trade talks “put Alibaba on the right side of all the issues on the table,” Executive Vice Chairman Joseph Tsai said on a fiscal Q4 earnings call May 15. Calling the trade war the big “elephant in the…
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room,” Tsai spoke as if a comprehensive trade accord was already in the bag. China’s “commitment to purchase more American products” means it will become a “net importing country,” reducing the U.S.-Chinese trade imbalance, he said. The Chinese e-commerce giant is "not concerned about slowing China exports affecting GDP growth because the Chinese economy is shifting from an export economy to a domestic consumption economy,” he said. "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population," Tsai said. "The middle class will double in the next 10 years, especially from the lesser-developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years." China in recent years also has made "significant improvements in reducing" intellectual property theft, as it "moves closer to global norms in protecting and paying for foreign IP," he said. Any trade accord with the U.S. will help further that goal, he said. “The vexing issues in the trade negotiations will resolve themselves, as the Chinese economy is already evolving to close the gap between the interests of the United States and China.”