Opinion

Opinion | Niall Ferguson

Meet the man poised to take over the world economy

Jack Ma attended the first meeting of the French-Chinese business council in Beijing on Jan. 9.
LUDOVIC MARIN/AFP/Getty Images
Jack Ma attended the first meeting of the French-Chinese business council in Beijing on Jan. 9.

The most interesting man at Davos was not He Who Must Not Be Named. (In the style of the Harry Potter books, I’m going to omit the name of the Dark Lord, otherwise known as the president of the United States. To be frank, I’m bored of him.) No, the most interesting man at this year’s World Economic Forum was a rather scrawny 53-year-old former English teacher from Hangzhou in eastern China whose business is poised to take over the world economy: Jack Ma, the founder and chairman of Alibaba.

As a boy growing up in the impoverished, chaotic China of the Cultural Revolution, Ma Yun (to give him his Chinese name) studied English, cycling miles from his home to meet the few English-speakers at the international hotel in Hangzhou, offering them free guided tours to build up his language skills.

In early 1995, Ma took a trip to the United States and had his first encounter with the Internet. Unlike Jeff Bezos, who started Amazon to sell books online, Ma from the outset envisioned an online marketplace for everything. He ran the name Alibaba past a San Francisco waitress. “What do you know about Alibaba?” he asked her, to which she replied: “Open sesame.” (Presumably if she’d said “Forty thieves” it would have been back to the drawing board.)

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So what else makes Alibaba different from Amazon? Two things. First, Ma moved faster than Bezos to diversify his business. In particular, Alibaba pioneered electronic payments, establishing Alipay to allow online purchases with no transaction fees.

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Today few things impress the Western visitor to China more than the ubiquity of electronic payments. Everyone pays for everything with their smartphones. Although Tencent’s WeChat messaging app now offers a rival service, it was Alipay that blazed the trail, not only with online payments but also with online money-market funds (Yu’e Bao) and an ever-growing range of online financial services, now spun off as Ant Financial.

As an investment, Alibaba has been a dream. If you bought the stock in the 2014 New York initial public offering, you’ve tripled your money. True, the past year was a great year to own Amazon.com: the stock rose 67 percent. But Alibaba’s share price doubled.

The second thing that sets Alibaba apart from Amazon is the sheer scale and speed of growth of the Chinese e-commerce market. Notice, too, that Bezos — especially since he acquired The Washington Post — is at daggers drawn with Him Who Must Not Be Named. Ma, on the other hand, couldn’t be on better terms with Xi Jinping.

“The political and legal system of the future is inseparable from the Internet, inseparable from big data,” he told a Communist Party commission last year. Technology, he went on, would soon make it possible to preempt criminal acts. “Bad guys won’t even be able to walk into the square.” Put differently: if the Chinese government wants data from Alibaba, Jack’s not about to say no.

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All this matters a great deal, because one of the implications of You Know Who’s “America first” policy is that the rest of the world is up for grabs. In his bland speech at Davos, the Dark Lord repeated his sales pitch to global businesses to invest in the United States. His administration’s slashing of the US corporate tax rate and sweeping deregulation mean that many probably will. But if multinationals such as Apple are going to move production back to America, what does that imply for the rest of the world?

Jack Ma has an answer to that question. “E-commerce is not for big companies or developed countries,” he said. “It’s for developing countries, young people and small businesses. We should not let world global trade be controlled by 60,000 big companies. We should make technologies and policies to encourage 6m, 16m or 60m businesses . . . Alibaba will make it happen.”

That’s smart. Every emerging market in the world lags behind China when it comes to e-commerce, from the nuts and bolts logistics of delivering packages to the high-end application of artificial intelligence to consumer credit. Ma’s new mission is to roll out the Chinese model not in the US or Europe but everywhere else.

Until recently, I was among those who assumed that the world would be divided up in the following way: the titans of Silicon Valley — Facebook, Amazon, Netflix, and Google — would take everywhere except China, which would be dominated by their Chinese rivals Baidu, Alibaba, and Tencent, or BAT. But what if it is BAT that takes everywhere except the United States?

The chatter at Davos was that He Who Must Not Be Named had been put in his place by some harsh words from the billionaire investor George Soros. But for me it was Ma who offered the better riposte to “America first.”

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In Verdi’s opera Attila, the Roman general Ezio says to Attila: “You can have the universe, but leave Italy for me!” Perhaps unwittingly, You Know Who just made a similar offer to Ma. “You make America great again,” replies Jack, “but leave the universe to me.”

Niall Ferguson is a senior fellow at the Hoover Institution at Stanford University.