The slowdown in China's industry is understandable as China shifts away from heavy industry, Alibaba founder Jack Ma said. (Photo : Reuters)
China’s economy would likely continue to grow at a rate “enviable” to other major economies for the next 20 years, Alibaba founder and executive chairman Jack Ma said, as he presented sensible arguments about China's economy in an interview published on Thursday, April 21, on his newly purchased Hong Kong newspaper, the South China Morning Post.
In the interview, Ma also discussed China's double-digit GDP growth rates of the 2000s, which slowed to below 7 percent in recent years, Fortune.com reported.
"There is no reason to expect that an economy of such size can maintain such a growth rate indefinitely, nor is it good for China to continue to grow at such speed," Ma said. "After more than 30 years' growth, spending a few years to adjust its course is reasonable."
However, among economists, it is a hot issue whether China can come out safe or can adjust its course away from the debt-fueled growth of the past half-decade.
According to Arthur Kroebel of Gavekal Dragonomics, it is neither boom nor bust for China which will instead spend the next decade in "genteel decline, much as Japan has since the 1990s," while the country cuts down a corporate debt mountain that exceeded 150 percent of GDP last year. This does not include the rise in government debt, the article said.
Ma also said that the headline GDP growth is manufactured, as he discussed some criticism of the government and explained it positively.
"Some say the actual [growth] number could be just 5 percent. But even with 5 percent growth, there is no other economy of such size growing at that speed in today's world," Ma explained.
Although he only considered the U.S. as the country's competitor, Ma said that China's economy is already more than double the size of Japan, the world's third largest. He added that although India's economic growth has surpassed China recently, with 7.3 percent compared to China's 6.8 percent, India's economy is only a fifth the size of China's.
Ma said that China's growth will be "enviable to most other major economies for another 15 to 20 years," as recent consumer data negates the slowdown in China's industries.
"The traditional industries are struggling, but we also see growth in domestic consumption, the services industry and the hi-tech sector, and young talents are flocking to these areas," the Alibaba CEO noted.
As China shifts away from heavy industry, the low-skill jobs that would be lost will be absorbed by the delivery and logistics sector, an industry heavily supported by Alibaba, Ma said. Cainiao, the Alibaba-backed logistics shipping company, has said that as early as 2021, it expects to deliver 100 billion shipments a year.
"The logistics and delivery industries create plenty of jobs for low-skilled workers," Ma said. "We still have a lot of room for growth."
