Thursday, September 11, 2014

Globalization: China - What We Could Learn From Alibaba

(Drivebycuriosity) - Alibaba, the Chinese E-commerce giant, is preparing his IPO on the New York Stock Exchange. Soon the online goliath will have to report quarterly earnings and a lot of other company numbers like every US listed company. Alibaba´s stock price, activities, profit & revenue numbers will draw the public attention to a neglected aspect of the Chinese economy: The explosive growth of the Asian Internet economy and the advancing Chinese service sector as a whole.

Today the public picture of China is pessimistically biased because the media are focused on the negative aspects: air pollutions, empty residental & office towers, export dependency and high debts. The sentiment for China is spoiled by notorious China bears like New York Times correspondent Paul Krugman and Jim Chanos, a hedge fund manager and short seller. These China pessimists have been banging the "China crash drum" for years  (driveby). The China crash callers claim that China is suffering from huge structural problems like too high debts and too huge investments into real estate which would cause a "hard landing" of the Chinese economy. 

Alibaba will show the other - neglected - side of China. Alibaba could open the eyes for a huge country which is rapidly advancing.  The Alibaba numbers - which are already big and fast growing - will show that China is rapidly transforming into a modern economy driven by a swiftly rising service industry. Alibaba will show the growing  importance of the Internet for China´s modernization. Alibaba - and other Chinese Internet giants - are driving the technological progress in China which will fuel the growth of the general economy and alleviate the problems the media and the China pessimists are too much focused on.

1 comment: