Jack Ma & China-US Trade

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Jack Ma is chairman on Alibaba, China’s version of Amazon. He is one of the wealthiest and most influential business executives in China and across the globe. At the World Artificial Intelligence Conference in Shanghai earlier this week, he argued for a clear demarcation between firms and governments. “I personally think that the government has to do what the government should do, and that companies do what companies should do…Protecting the backward forces who are crying out loud will be the most important factor in destroying innovation” (source: Wall Street Journal).

Ma’s comments are welcome in a world where US and European executives often hesitate to defend free markets, development, and even their own firms. Ma’s case for markets is clear, rational, common sense. There is a regulatory role for government, but it should be limited. Firms—not governments—create new products and services, hire and pay employees, and promote economic development. Protectionism cements the status quo and should be rejected.

Ma’s comments have direct relevance to the ongoing US-China trade squabble. Intellectual property, currency devaluations, and limits to American firms operating in China are legitimate US concerns. Governments should secure and enforce intellectual property rights so firms can invest in discovery without fear of well-capitalized free riders copying and monetizing their innovations. But governments should not manipulate exchange rates and arbitrarily prop up some products at the expense of others when they do so. Dollar and yuan valuations would adjust appropriately on their own if left to global traders.

Of course, excessive government intervention into business activity is not restricted to China. Federal, state and local governments in the US collude with cronies in the business community to create subsidies and restrict innovation as well. Markets are freer in the US than in China, but it is fair for China to insist on a level playing field in both countries as well. In this instance, level should be less government control and influence across the board, not more.

2 Comments

2 Comments

  1. joshua  •  Sep 20, 2018 @8:50 AM

    Jack Ma is a businessman. He has enough respect and clout to speak out even if it offends his own government.

  2. Jenny  •  Sep 21, 2018 @6:38 PM

    We need to play out cards right with China. Tariffs hurt everyone.