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Only Ma could go to America

Did the Alibaba founder’s meeting with President-elect Trump soothe US-China relations? Follow the money.

It would be pushing it to describe Alibaba chairman and founder Jack Ma as a water carrier for Beijing, but it is hard not to see a clear message from China’s political elite behind his meeting yesterday (January 9) with US President-elect Donald Trump.

The rhetoric between Teams Trump and Xi has been getting increasingly bellicose, largely at the former’s instigation. But while Ma did not arrive at Trump Tower with an offer that couldn’t be refused, it was one the Donald cannot ignore either.

As the leader of China’s Amazon, Ma outlined a plan to create potentially a million jobs in the US. Its bedrock was not a vague commitment towards inward investment but rather the creation of a system that would make it easier for American companies to sell their products in China via Alibaba’s various online marketplaces. These provide access 350 million consumers as well as wholesale buyers.

Ma suggested that the one-million-job target could be reached chiefly by expanding opportunities for smaller companies, with each adding an average of one staff member to meet a resulting increase in demand. It’s an idea not totally at odds with reality – Alibaba has a track record of introducing such major US retailers as Macy’s to China.

While Trump has been pushing all the Middle Kingdom’s wrong buttons over Taiwan, trade tariffs and the South China Sea, Ma targeted a sweet spot for a President-elect who has set himself the target of adding a staggering 25 million jobs domestically during his administration.

And for the notoriously thin-skinned Trump, a White House-Alibaba alliance could also allow him to beard one of his least favourite people at home, Amazon CEO Jeff Bezos. The fact that the Bezos-owned Washington Post remains one of Trump’s most acerbic media critics rankles him persistently.

For his part, Ma obviously wants to keep the Bezos behemoth in its currently modestly sized Chinese box. But beyond that, Alibaba does have serious American ambitions. It opened a second Silicon Valley data centre last year and is rumoured to be assembling a skunk works there. It also has an increasing presence in Hollywood, having backed the most recent movies in two particularly American franchises, Mission Impossible and Star Trek.

But the Beijing component of the meeting remains simultaneously the most eye-catching and the most opaque.

You don’t build any kind of Chinese company valued at nearly $300bn (£245bn) by being a mere Beijing shill, but Ma also knows how to play the game. The most often cited example of that is his acquisition last year of Hong Kong’s leading English-language newspaper, South China Morning Post. Since then, it is seen as having taken a ‘soft’ pro-Beijing view in coverage of the relationship between the mainland and its often-fractious ‘Special Administrative Region’.

So what, if anything, were the big messages? Probably the obvious ones.

The US ran a $336bn trade deficit with China in 2015, but within that are $162bn of exports. China is the US’s third-largest national export market after Canada and Mexico (fourth, if you include the EU). Ma is talking about a mechanism for addressing that imbalance by - despite Chinese GDP growth slowing - tapping into his country’s expanding middle class and burgeoning e-commerce market.

Meanwhile, China is also wary of the apparent mutual admiration society Trump has with Russian President Vladimir Putin. Reminding Trump that China has individual companies that can walk into his office and start talking about mega-job opportunities points to something the Middle Kingdom has which its economically Doldrummed neighbour does not.

In both respects, China is approaching Trump based on his primary policy commitment to voters, putting America first – and let’s not get too fussy about that foreign policy stuff.

One final point is that this is largely how China saw itself dealing with a Trump presidency before he amped up his anti-Sino Tweetstorm: his main way at looking at the relationship will be to prioritise business rather than political considerations. In that context, Trump’s main comment after meeting Ma probably satisfied both Alibaba and Beijing:

“Jack and I are going to do some great things.”

Hmm. Methinks, I'll now be goin' to t'foot of our stairs.

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