Trade wars are easy to start but difficult to stop and should not be wielded as a weapon between countries, Jack Ma, co-founder of Chinese e-commerce giant Alibaba, told an international forum in Switzerland on Tuesday.
“When trade stops, sometimes the war starts. So trade is the way to stop wars. Trade is the way to build up trust. Trade is not the weapon to fight against each other,” Ma said in the opening panel discussion at the World Trade Organisation Public Forum in Geneva.
Alibaba owns the South China Morning Post.
Ma was one of five people on the panel – including former US assistant trade representative for the service sector Christine Bliss – examining the ways technology would reshape trade by 2030.
Their assessments came as the United States and China are engaged in an escalating trade war that appears to be taking a bite out of the Chinese economy.
China’s latest official purchasing managers’ index pointed to weakening in the manufacturing sector in September. While the index for the country’s service sector held up for the month, the factory index fell to 50.8, just above the 50 mark that divides expansion from contraction, with declines in new export orders and output, according to China’s National Bureau of Statistics. It was the index’s second-lowest level in a year.
Ma said China and the US should work together to confront the major tests of the next few decades.
“It’s easy to launch a war, but it’s difficult to stop the war,” Ma said. “[Over] the next 30 years, the world is facing huge challenges of the technology revolution. I think China and the US should work together to solve this challenge, create more jobs, cure poverty, use technology to solve disease and the environment – instead of this kind of war. It’s going to destroy not only China-US trade but also lots of other countries and small businesses.”
Earlier in the discussion, Ma forecast that by 2030, 80 per cent of businesses around the world would be small enterprises, and globalisation would be critical – not optional – to their survival.
“If you are not globalised, you are dead,” he said, countering the protectionist view promoted by US President Donald Trump.
Ma also called on the business community to stand against the growing trade conflict, saying technology could help find a way beyond the tensions.
“In the 21st century, we should have the solution to solving the problem by not confronting each other … [The trade war] may last for 20 years if it’s unfortunate. We are hopeful that … using … the internet to support small and medium enterprises, using innovation, there is a way out.”
Responding to Trump’s repeated claims that the US’ large trade deficit with China justified its hardline stand against Beijing, Ma said the balance of trade was not the issue given the US economy continued to have healthy growth of around 4 per cent with little narrowing of the deficit.
In August, the overall US trade deficit in goods expanded to about US$75.8 billion, partly because of declining exports to China, according to the US Census Bureau.
“It’s about trade quality, not about trade deficits,” Ma said.