More and more it looks like the trade war won’t be wrapped up by Christmas. This week, China’s richest man, Jack Ma, warned investors that the trade war is “going to be a mess,” predicting that it wouldn’t last 20 days or 20 months, but “maybe 20 years.”
The Alibaba (baba) founder made the remarks during an investors summit in Hangzhou, Alibaba’s hometown. His warning came just hours after the Trump Administration issued a new round of tariffs on $200 billion worth of Chinese goods.
According to Jack Ma’s take, the tariffs are less about trade and more about containing China’s growing economic clout. Drawing a comparison to U.S. trade action against Japan in the 1980’s, Ma mused that the U.S. was now targeting China because it has become the world’s second largest economy. “This kind of thing happens,” he said. “It’s very natural.”
But the Alibaba chairman and former CEO did concede that China needed to do more to open its economy and called on Party leaders to view the current situation not as a crisis but as an opportunity to “upgrade” economic policies.
Ma had a similar line for the Alibaba investors gathered in front of him. While admitting that the trade war had been damaging for Alibaba’s $410 billion business, Ma pledged the company would ultimately come out on top. “Do not worry about Alibaba. If Alibaba cannot sustain growth, no company in China can grow,” he told the crowd, to rapturous applause.
Alibaba’s shares have dropped 25% since their high in June and investors were spooked by a weak earnings report in August. There was even more concern when Jack Ma announced he would retire as chairman of Alibaba next year, leaving CEO Daniel Zhang to take his place.
Ma told investors at the conference, “I’m 100% sure Daniel will do a better job than I do.” But If Ma’s right about the trade war lasting 20 years, his successor will have a hard time ahead.