The trade war between the US and China could last for 20 years, Jack Ma, executive chairman of technology group Alibaba and China’s richest man, warned on Tuesday.
Speaking after China vowed to retaliate against US plans to impose tariffs on about $200bn of Chinese imports, Mr Ma said of the dispute: “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.”
However, while Mr Ma acknowledged the impact of the US-China trade war, which no one could win and which would affect both countries as well as his company, remained gung-ho about his legacy. “I don’t worry about Alibaba. If Alibaba cannot grow, no company in China can grow,” he said.
Mr Ma, who earlier this month announced his plans to step down from the company he founded 19 years ago, outlined a strategy of globalisation, expanding in rural China and the internet of things.
“Next year I won’t be able to speak to you as chairman,” he told the 600-plus audience at the event, held at Alibaba’s Hangzhou campus. “I will sit there as an investor and listen to the team speak.”
Mr Ma, who will hand over the chairmanship to Daniel Zhang, chief executive, next September, also sought to dispel some of the stories doing the rounds about his departure.
“People call me these days. I have government officials call me, [saying] ‘Are you crazy? What will happen?’ Rumours outside China [ask is it] because the government want to push you out? Ha, nobody can [push me out],” he said.
“People have a lot of guesses. But for me I know this has been 10 years in preparation.”
Unlike last year’s investor day, where Alibaba forecast annual revenue growth guidance that exceeded analysts’ estimates by 10 percentage points, there were no fresh forecasts.
Instead, executives reiterated some earlier targets, including passing $1tn in gross merchandise volume — the total amount of goods sold across its commerce platforms — compared with $768bn last year.
Alibaba, which has its roots in ecommerce but has since branched out into cloud services, digital entertainment and food delivery, also put a price on its investment portfolio, valuing it at $80bn.
Joe Tsai, executive chairman, said most of the funding had gone into international expansion in the past three years, as well as on digital media and entertainment. In the first quarter of this year the focus was on new retail, and the group also ploughed more funds — along with SoftBank of Japan — into Ele.me, its food delivery and local services business.
“I’m looking at venture capital-like returns except our success rate is greater, because we have people to make sure they work,” Mr Tsai said.
Alibaba and arch-rival Tencent can also boost returns on their investments by channelling their users on to other services: shoppers on Alibaba’s Taobao and Tmall shopping platforms are also candidates for watching movies, paying for good and services or ordering food deliveries.
Investments have broadly tracked free cash flow generation over the past three years, he told the audience, adding: “A lot of you will be angry if we under-invest. We are not a dividend-paying company.”
Of the cumulative $33.8bn free cash flow since fiscal year 2016, about $30bn has been invested leaving “a little cushion to make more investments in the future”.
