Jack Ma, Alibaba Group: Stanford GSB 2015 Entrepreneurial Company of the Year (Transcript)

We need a common language between chick and ducks, right? People talk the same language, we have the same standard. And I think this kind of dialog’s pretty effective and useful. And I suggested that we should have a US and China business dialog talk annually, every year. Once in America, once in China, get the government leaders sitting there, and how can improve the business environment. Normally government leaders have a lot of a dispute argue, but business people, we talk a lot. If we don’t talk, will be problems. So I think the Seattle trip is good.

JERRY YANG: Yeah. Good, I’m surprised you even answered my question. That’s good. Usually he’ll just talk about whatever he wants to talk about. So thank you.

JACK MA: I try to talk the ducks language, you know?

JERRY YANG: The Chinese economy has been on everybody’s mind I mean and people are worried here that the slowdown in China will affect global economy. How are you seeing things? I mean, obviously, the stock market has been kind of a symbol of something that’s a bubble. But what is going on in China from your viewpoint, what’s your perspective? I mean, you’re not an economist, but you see so much going on there.

JACK MA: Yeah, well, first, I think people in the States and the west worry about China. I think it’s a good thing, because every time when west worry about China, China go up. And when people in the western think, wow, Chinese has a good future and Chinese has a problem and the west has been suspect Chinese growth for past 30 years, so that is fine. It takes time for both side to understand each other.

China I think keep on growing for 10, 11, 12% for so many years. I don’t think can last long and it’s impossible like a side effect, it’s like a human body when you are 1.2, 1.8 meters tall, you cannot keep growing at that pace all the time. You have to keep growing your quality, the brain not the body size. And especially today, I don’t think first, it’s impossible to keep 10, 15, 11% of growth annually.

Second is that China needed to be slowed down, it had to learn to be slowed down because when you see the water, when you see the air, when you see all the resources we use, it’s impossible and it’s ridiculous and we don’t want China making a lot of money and we spend the money on the medicine and spend the money on the hospital, this cannot work.

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So on the other side, people like me, I think China is slowing down for 7%. Good and but the thing, even 7%, think about, we are still the fastest growth economy in the year. With the 7% of the total GDP, think about it guys, this is lots of money. We should use the money in a better way, we need quality not quantity. 30 years ago, we needed a lot of quantity, but now it’s quality. So, I think in the west have a high expectation that China should have quality, China should control the air and the pollution and this and that. When we really start to do it, people start to worry, which is fine, but this is slowing down.

On the other thing is that I think China economy is not that bad. There are two things. There are three called three marks, horse, carriages — carriages, investment infrastructure, exporting, domestic consumptions. These are the three things that China’s always proud of, that these are the three engines that put China economy grow.

But the investment of infrastructure, slowing down. And exporting, slowing down. These are the two things government is very good at, they love to do it, because they have the power to exporting and investment. But there’s one thing they could not do it in a good way is the consumptions, because consumption is not determined by government, consumption is determined by entrepreneurship and market economy. So I think people, like us have to create opportunity. Now it’s our turn, not government’s turn.

After 30 years, government pushed the economy in their way. And now, it’s our way. So I considered this as opportunity for real market economy. And the next thing I said yesterday on a conference to the dialogue, there are a lot of misunderstanding culture difference between American and Chinese. When Americans think about economies slowing down, that means people don’t have money to spend. Guys it’s different, you guys know how to spend tomorrow’s money, future’s money or other people’s money.

But we Chinese, our habit is to save money. We always keep the money in the banks. China has been poor for so many years. So we worry, when we have money, we put it in the bank. When we have money, we put it in the bank, because we know tough days are coming. So you see, China has the largest banking deposit in the whole world. We also deposit a lot of money in the States. When we know when the tough day comes, we start to pay, we start to buy.

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Now the tough day comes, people still start to buy. With our numbers shows on our website, we are the largest 12% the total China retailer. The consumption is still going up healthy and aggressively, especially the economy’s bad people start to buy online because it’s cheaper. The other difference, my grandmother has only one shirt in her robe. My mother has three, my daughter’s generation, 50. And 48% of them should never wear it. This is called domestic consumption.

And we have to build up this kind of behavior and make people start to spend money and this is something the government is not good at, we know how to make this thing happen. So I think generally, I’m positive. But next two or three years, maybe have problems. People say, well, anti-corruption, but think about anti-corruption and rule by law is laying a great foundation for the market economy. You don’t want to go do business by bribery, you don’t want to have an unfair environment in China. So market economy is by rule by law and market economy is about clear, transparent and fair. And I think this year, last year, bad, but this is why we need entrepreneurship. This is why we need that the businesses drive the economy. So I’m a positive and when people worry, I’m happy. When people too happy I start to worry. And I don’t worry about the things the president is worried about, worry about the things that nobody worry about and this is the opportunity. So I’m positive, because I’m positive, but I’m not stupid. I know that we have problems, but we have to solve the problems little by little and that’s it.

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