Who is worried about the slowing Chinese economy? Alibaba founder Jack Man believes that only Americans are concerned about China. It’s time they should stop worrying about China and start worrying more about their own economy, said Ma. Notably, his statement comes just weeks after Alibaba lowered its Q2 revenue guidance due to a cooling Chinese economy.
Unlike Americans, the Chinese people love to save money
Speaking at the annual Clinton Global Initiative meeting, Alibaba executive chairman said China can easily weather a global slowdown due to its sky-high savings rate and its transition from an export-led to a consumption-driven economy. “Every time you think China is a problem, we get better.” According to World Bank, China’s gross savings as a percentage of GDP stood at 50% in 2013 compared to just 18% for the United States.
Americans believe that when the economic growth is low, the consumption will decline. But they ignore the fact that the Chinese love saving money, unlikely Americans who spend their savings and borrow money from others to spend. Ma noted that the Chinese government has focused strongly on exports and investments. But it’s time for entrepreneurs to become the driving force in a consumer economy, reports CNBC.
Alibaba shifts focus to overseas markets
The Chinese economy grew at 7.4% in 2014, the slowest pace since 1990. The country’s GDP is expected to expand 7% this year. Though Jack Ma is confident that China will easily transition to a domestic consumption-driven economy, some experts have expressed concerns over Beijing’s ability to navigate the transition. The slowdown follows more than two decades of red-hot double-digit percentage growth rate.
Alibaba is expanding aggressively in overseas markets to lower its reliance on China. The Hangzhou-based company aims to serve two billion customers worldwide by 2019. Alibaba shares have declined more than 44% since the beginning of this year. Anyway, Jack Ma sees the positive side of the China’s economic transition. There will be no terrible water, terrible sky or terrible environment.