Jack Ma, the found of Chinese online retail giant Alibaba, however, does not see it as a big problem.
“Recently, signals of China’s economic slowdown have triggered widespread concern and, I believe, overreaction around the world,” wrote Ma.
To him, all this attention reflects the global importance of the Chinese economy. Additionally, he thinks that continuing to strive for the double digit GDP growth rates of the past is unrealistic.
“The current GDP growth pattern is not sustainable,” said the letter. “In fact, if China continues to pursue the high growth rates of the past, then China will pay a high price.”
Ma said the environmental damage of the high rate of growth has been severe, and there are other advantages to embracing the economic slowdown.
“China’s economic development is no longer in need of increasing its numbers, but of increasing its quality. China is the world’s second-largest economy, and even with a GDP growth rate of 5%, the growth rate is more than double that of developed economies,” said Ma.
He also pointed to the generally understood plan that the country is shifting from an investment-based economy to a consumption-based one.
“All in all, China’s economy has immense potential. It will not be easy, but China’s future ‘economic miracle’ will lie in its ability to boost productivity and its use of big data and Internet technology to stimulate domestic consumption and generate exponential development opportunities,” wrote Ma.
Alibaba is a massive retailer in China. The company estimates that there are 367 million users on the service spending around $US1,056 per person annually.
These numbers have come under scrutiny recently, and while they seem plausible, Alibaba’s creation of the new website, which is a partnership with branding firm VSA Partners, could be interpreted as a response.
The new site is described as a way to better communicate the company to its Western investors.
“The majority of our products and services are not accessible outside China, which makes it difficult for our overseas shareholders and stakeholders to fully understand the company and what it is like to be an Alibaba customer,” said Ma in his letter. “As a result, many are trying to understand us through the lens of an outsider and may not have a full or accurate understanding of who we are and what we do.”
Alibaba will most likely play a key role in the shift to a consumer-based economy, as 9% of all retail sales are down online, according to Alibaba, and Ma expects that to grow.
So the world may be worried about China, but it doesn’t faze one of the country’s richest men.