Alibaba executive chairman Jack Ma caused quite a stir this summer by brokering a high-powered meeting in Washington between Chinese and US captains of industry.
The July 18 meeting came several months after Ma chatted with President-elect Donald Trump in New York about a plan to create a million US jobs by enabling small businesses and farmers to sell American goods to Chinese and Asian consumers on Alibaba’s platform.
Wilbur Ross, the Trump administration’s commerce secretary, attended, as did CEO heavyweights like Blackstone Group founder Stephen Schwarzman, Jamie Dimon of JPMorgan Chase, and Bank of China chairman Tian Guoli.
Ma acted as master of ceremonies at the meeting, which tried to put a healing salve on such contentious issues as Chinese trade practices, bilateral investment rules and intellectual-property protection.
The upshot of the get-together, held a day before important economic talks between the US and China, was inconclusive. But US media were soon buzzing with speculation about what Ma was up to and whether he would succeed in currying favor with the White House while carrying the ball for Chinese business interests.
Stroking autocratic egos
Porter Erisman, a former Alibaba vice-president who knows Ma well, says he doesn’t know if Alibaba’s executive chairman enjoys any specific chemistry with Trump appointees like Ross. But he believes working with the White House will be a breeze for Ma because “dealing with Trump is just like dealing with the Chinese government”.
He notes that China, in essence, has an autocratic, authoritarian government and that Trump, if left unchecked, would adopt a similar autocratic style in the US.
It’s all about dealing with familiar personalities. “Dealing with Trump is probably easier for a Jack Ma than a Mark Zuckerberg, because in China, people are used to stroking the egos of autocrats,” Erisman said.
This may or may not be handy in getting the US government to clear a still-pending bid by Ma’s Ant Financial to acquire US money-transfer firm MoneyGram International for US$1.2 billion.
Ma has always been politically savvy, says Erisman, and when they worked together in China, they always looked carefully at what the company’s and government’s goals were.
“We did everything we could to highlight those aspects of our business that were aligned with the goals of Chinese government leaders,” Erisman recalled.
Erisman says Ma is focusing on the US and its market because developments have reached a critical phase – both for Alibaba and US companies.
Alibaba, by the numbers, currently operates the largest online shopping mall in the world. Erisman argues that now is the time for US companies to reap the benefits of Alibaba’s platform by selling products to the millions of consumers in China’s hinterlands that couldn’t be reached before.
He argues that selling online to Chinese consumers in smaller cities and rural areas, will, in turn, create more US jobs. “It won’t create manufacturing jobs, but it will create jobs related to selling in China.”
US and Chinese interests align insofar as China is trying to increase domestic consumption while Trump is trying to promote US exports under a nationalist banner. Ma, according to Erisman, is keenly aware of this convergence of interests and is deftly addressing the needs of both countries, while staying out of Trump’s crosshairs.
He calls Ma’s courting of Trump and his appearance outside Trump Tower in New York in January a “brilliant, master stroke, because Jack Ma and Alibaba could easily have ended up on the wrong side of Trump’s tweets”.
But despite his recent US focus, Erisman says Ma has his sights on a much-bigger footprint: He wants Alibaba to be the dominant e-commerce player in emerging markets in Latin America, Asia and Africa.
“Alibaba’s business model is better suited for developing countries than developed countries,” Erisman said.