ExclusiveAlibaba’s Jack Ma on China’s economy, Hong Kong and the South China Morning Post: full Q&A
On the South China Morning Post and the media
Now that Alibaba has acquired the South China Morning Post, what is your vision for the paper? What role do you see the Post playing?
We are very excited that we can take part in the future development of the South China Morning Post. The Post is a great media outlet – one of the best in Hong Kong. When Mr [Robert] Kuok took over, it became one of the top media in Asia. What Alibaba wants to do is to make it a global media outlet through our technology and resources. Asia is changing and China is changing. The Post will have great opportunities. With its access to Alibaba’s resources, data and all the relationships in our ecosystem, the Post can report on Asia and China more accurately compared with other media that have no such access. If the Post can play the role of a connector between the West and the East, I have confidence in the paper’s future success.
Alibaba said the Post should offer readers a narrative of China that is different from that offered by other Western media. What narrative will this be?
I think first of all, it is important to be fair to the reader. Readers have the right to know what’s happening in China in a factual and objective way. I’m lucky that I have the opportunity to travel around the world. The more I come to know about the outside world’s perception of China, the more I feel there are all sorts of misunderstandings and, to a certain extent, people do not get the full picture from the media. A lot of foreigners have few opportunities to visit China, and a lot of Chinese people do not have the chance to go to Europe or to the West. There is an immediate opportunity for us to bridge this gap as a responsible media outlet. What a publication can do is to help people get a clearer picture without jumping to any rash conclusion. I’m very happy that the Post can take the responsibility to report on China in a broader and deeper way. I believe the Post must be fair to our readers. We should let our readers see China from more angles and perspectives.
WATCH: Jack Ma of Alibaba says “we should be fair to our readers” when reporting on China
Some commentators reacted to the statement by speculating that it means the Post’s China coverage will become more positive or even gloss over some tough issues confronting China. What would you say to these speculations?
I’m not a journalist. But I think if we come with a predetermined angle in our coverage, be it positive or negative, the final report will surely become one-sided. I don’t see it as an issue of being “positive or negative”. It is about being impartial, not one-sided. The paper’s China coverage should be objective, reasonable and impartial. If people really want to understand China better, we need to provide media [reports] that can be easily understood by readers in both the East and the West. As I’ve said, we should offer a fair chance to the readers, not only a fair chance to China and to us.
How do you think we can tell the complicated, at times contradictory, China story to Western readers in a more engaging and impartial way?
I believe the most important thing for the media is to be objective, fair and balanced. We should not report something with preconceptions or prejudice. Sometimes people look at things purely from a Western or an Eastern perspective – that is one-sided. What the Post can do is to understand the big “why” behind a story and its cultural context. Western culture is scientific and tends to see things in black and white. The Eastern approach is like taichi – everything is in transition. The Post could help to explain this Eastern mentality to our readers better. They may not agree with the other side, but at least they can understand where the other side comes from.
[Alibaba executive vice-chairman and the Post's chairman] Joe Tsai has said Alibaba will leave editorial policy in the hands of the Post’s editors. Do you see yourself as a hands-on or hands-off proprietor? What sort of input do you see yourself giving to the editorial board?
I have neither the experience nor desire to interfere with the newsroom operation. I will not take part in the editorial decision-making. The media has its own professional rules and standards. For me, maybe I will give input on the business side of the operation and the future business model of the paper. I can also participate as a reader and give feedback on how to improve readers’ experience. As I said to Joe [Tsai], “You are going to the Post as a representative of the Post’s readers. You don’t have to represent shareholders. You speak for the readers.” And we are ready to contribute resources, to beef up the newsroom and the editorial team to strengthen its coverage. The best return on our investment is seeing the Post as a respected publication.
On the Chinese economy and investing in China
As a key Chinese entrepreneur, what do you think is happening to the economy’s slowing growth? Are supply-side reforms and a looser monetary policy the way ahead or will that be paved with risks that may further threaten the economy?
China has been growing at a high speed for more than 30 years. There is no reason to expect an economy of such size to maintain such a growth rate indefinitely, nor is it good for China to continue to grow at such speed. It is not sustainable and will have a harmful impact on China’s environment. We should be more worried if China’s economy today continues to expand at double digits.
China is facing pressing issues such as a deteriorating environment and a widening wealth gap. If we cannot change our growth model, we could run into trouble. But only with a slower growth rate can China’s economy change its course. It is easy for a small boat to change its course. But as the world’s second-largest economy, China is like an ocean liner. We have to choose either to not slow down and overturn the ship, or slowing a bit to make the turn.
In the next three to five years, China’s economy will face stiff challenges. After more than 30 years’ growth, taking a few years to adjust its course is reasonable. The economy is growing at 7 per cent – some say the actual rate could be just 5 per cent. But even at that rate, there is no other economy of such size growing at this speed in today’s world.
We should not panic. A critical parameter is the employment rate. If we can keep it stable, the economy will be fine. The traditional industries are struggling, but we also see growth in domestic consumption, the services industry and the hi-tech sector. Young talents are flocking to these sectors, while the logistics and delivery industries create plenty of jobs for low-skilled workers.
There will still be plenty of opportunities in China for the next 15 to 20 years. It’s a country with 1.3 billion people, of which 700 to 800 million are out of poverty and 200 to 300 million are middle class. By developing our internet technology, China can drive tremendous growth in the consumer, services and IT industries. I believe there will be some great enterprises arising from China. The monetary policy and supply-side reforms are very important and can help rejuvenate China’s economy. But to me, the most important thing is entrepreneurship. If this can flourish in China, China will become successful.
Within three decades, China evolved from a net importer to an exporter of investment and technology. What is your advice to those seeking business opportunities in China and vice versa?
The economic slowdown has triggered panic in many countries that supply raw materials and resources to China. This panic has been amplified and become bigger than the real problem facing China’s economy. Some foreign investors were spooked and fled China. There is nothing we can do about that. The outflow of capital actually presents an opportunity. To do business in China, you have to take the long view. There are still plenty of opportunities in China. There are immense opportunities in rural areas. China is also shifting focus to services industries, the IT sector and domestic consumption. If you stick to traditional industries like steel and oil, you have to be selective.
Some people ask me why there are so few American internet companies becoming successful in China. In fact, there are only a handful of them doing business in China. Over the past 20 years, China has had hundreds of thousands of internet start-ups and only a few have survived. The really big ones are just Baidu, Alibaba and Tencent, and there are 20 to 30 successful internet companies in China. To succeed as an innovative company is difficult and this is the case everywhere. Can you think of a Chinese or European company becoming truly successful in the United States? Doing business in another culture and another country is always difficult, particularly if you want to become successful after just two or three years. You need to take the long view in doing business, especially in China. You need to learn how to understand and appreciate local culture. That is the key to success in today’s globalised world.
Alibaba has managed to make its mark globally. If you were to place bets on future Chinese companies or sectors that will go global, what would these be and why?
Alibaba has yet to become a truly global company. We have some brand awareness around the world but we cannot say our globalisation effort is already successful. We are taking steps to expand our footprint and the progress is encouraging. Today, Alibaba is trying to build a platform that will enable every company and individual to do business with people in other parts of the world. Alibaba’s mission is not for itself to go global. It is to take other people’s business to anywhere in the world.
Every company and every sector has the chance to become successful and go global.
We should judge if a company is truly international by looking at whether its management has a global perspective. If you have a factory overseas, you can’t call your business global – you simply have a factory in another country. You have to really serve the local community, add value to local culture and provide unique services to local people, then that is a global business.
On Chinese culture and the East-West divide
Since China’s opening up, the country has made epic progress but its soft power has not grown in tandem. Does this concern you?
China’s economy has achieved tremendous development over the past three decades. It is hard to find another country that has lifted so many people out of poverty in such a short time. Yet it’s easier to build up hardware and infrastructure than to cultivate soft power – that takes time and China’s soft power still lags its infrastructure development . For eight centuries or more, China was a world-leading civilisation with the largest gross domestic product. Because of our isolation policy, we fell behind. China opened up again over the last three to four decades, trying to change its system and embrace the world. The country has made great strides in growing its soft power and cultural influence.
Chinese people have never stopped learning from the West. We always want to find out how things work in the US, but the Americans aren’t as curious about China. I’m glad to see Chinese people keep learning the best from the West. Today if you ask 100 young Chinese, maybe 80 of them can speak some English. But if you do it in the US, can you find 20 of them speaking some Chinese? I think that would be difficult. It takes time for a civilisation to recover and rejuvenate. It is easier to build a house in one or two years, but it will take one or two decades to turn it into a home. I’m confident that China’s soft power will improve, but we need to be patient.
You once said you are not strongly religious but you are fascinated by religion. Buddhism and Taoism, just like the teachings of Confucius, are part of the very DNA of Chinese culture, but these religions have faced tremendous challenges brought by the onslaught of modernity. Do you think their teachings are still relevant to Chinese people today?
Western culture is more knowledge-focused. It is inquisitive and acquisitive. Acquiring knowledge makes you smarter and makes you more capable of creating and acquiring material goods. Eastern culture is more wisdom-focused. The stress is on understanding what your essence is and to unburden yourself from the non-essentials. The key is to understand what is not crucial in life and what to give up.
With the rise of sophisticated artificial intelligence like AlphaGo, we face a challenge: you can no longer compete with machines over intelligence. But the fun part of the game Go is to see your opponent making mistakes, in provoking him to be angry. Winning or losing is secondary. AI cannot understand the concept of “fun” and therefore it cannot enjoy the game. That is why I think in the future, technology has to be fun. Alibaba has the 2H strategy for our future: happiness and health. If the advent of technology cannot make people happier and healthier, there is no point doing it.
On Hong Kong
What do you think of Hong Kong’s present predicament?
The problem of Hong Kong is not caused by mainland China or Western countries; it is self-inflicted. Hong Kong has become intolerant. The city has lost its can-do spirit. The big businesses are less willing to take risks. I talked to some young people in Hong Kong and they said they are lost. Young people indeed have fewer opportunities than before, but is it true that there is no more opportunity for them? No.
Hong Kong has some unique strengths. It has the best location. It has “one country, two systems” that allows it to enjoy the good things from China’s growth and the best things from the West. Hong Kong has a great education system. The quality of Hong Kong’s graduates can match the finest from any other city. Its services industry is first class. Hong Kong people say Hong Kong needs to preserve its uniqueness. I say Hong Kong’s uniqueness is in its diversity, its tolerance of different cultures. Young people need to understand that because Hong Kong is open to all, sometimes some bad elements will also get in. China does not want to see Hong Kong in decline. I have full confidence in Hong Kong’s future.