Trade is about respecting other cultures and nobody can stop globalization, Jack Ma, the billionaire co-founder of Chinese e-commerce giant Alibaba Group said on Monday at the Boao Forum for Asia in China’s southern Hainan Province.
“Globalization is great thing, but over the past forty or thirty years, it’s not inclusive enough. Developing countries, young people and small businesses do not benefit from that,” Ma made the comment at a dinner with International Monetary Fund (IMF) Managing Director Christine Lagarde.
As a businessman, Ma expressed his concerns over the recent trade tensions between China and the US. As the two biggest economies in the world, China and America definitely have problems, but it does not necessarily have to lead to a trade war, according to Ma.
“I don’t think trade deficit is a problem… In the past twenty or thirty years, through trade, China made revenue and America made profit,” said Ma.
“About jobs, last quarter, American unemployment was 4.1 percent, at historical low. There are about 6 million jobs waiting for Americans,” he said.
“If China and US have good relationship, we can not only make 1 million (jobs), we can make 10 million or 20 million jobs for both countries. If they have no good relationship, we’re going to destroy 10 million jobs,” said Ma.
Last year, Ma promised to create 1 million jobs by supporting small US businesses in selling to China and the rest of Asia through Alibaba’s network.
Lagarde: Trade based on rules
While attending the dinner with Ma, Lagarde also called for taking advantage of trade and solving disputes through the established rules, and she warned of the temptation of protectionism.
“Trade must be according to the rules that the players are giving to themselves. So there is WTO which has provided [rules] for multilateral trade,” She stressed.
“When there is allegation of dumping and unfair trade practices that contravene the rules, there is mechanism in the rules that is called dispute resolution mechanism that needs to be used,” said Lagarde.
“As trade is picking up again more than current growth, let’s take advantage of it,” said Lagarde.
“Trade has been a major factor in reducing extreme poverty, in bringing people out of poverty, and in spreading innovation,” said Lagarde.
Back in the mid-1980s, the number of people in extreme poverty was about 90 percent. In 1990, the number went down to about 37 percent of total population. Today’s number is around 10 percent, according to Lagarde.
“If we want to have reduction of poverty, improved productivity and more growth…, we need to have trade,” said Lagarde.
“We cannot deny that around the world, there are some regions and some industries that have been affected by trade. They have partly affected by trade and predominately affected by technology. But for those people and regions seriously affected, measures have to be taken, whether by way of readjusting them, retraining them, and giving them support,” said Lagarde.
She stressed that trade should be conducted under the terms which are predicable, based on the rules, and which do not disadvantage those people who will be displaced, will lose their job, but need to be given another one.
A global economic recovery has really taken root, and about 120 countries around the world are expected to grow 3.9 percent this and next year, with the numbers close to the pre-financial crisis level, according to Lagarde.
“Although the sun is shining, we have to look at the clouds on the horizon. One is protectionism temptation,” said Lagarde.