Alibaba tells Trump we ‘support American brands’

22-Aug-2020 Intellasia | BBC | 12:30 PM Print This Post

Alibaba has moved to ease tensions with Donald Trump, as the US president continues to threaten Chinese firms.

Chief executive Daniel Zhang said the online retailer’s policies “support American brands, retailers, small businesses and farmers”.

The comments came as the tech giant announced a better-than-expected jump in quarterly sales.

Meanwhile Trump has promised to impose tariffs on US firms that refuse to move jobs back from overseas.

Earlier this month US Secretary of State Mike Pompeo called on American technology firms to cut ties with Chinese companies, including cloud-computing providers Alibaba, Tencent and Baidu as part of the Trump administration’s so-called “Clean Network” programme.

It came as Trump signed two executive orders targeting Chinese-owned video-sharing app TikTok and messaging platform WeChat.

“Alibaba’s primary commercial focus in the US is to support American brands, retailers, small businesses and farmers to sell to consumers and trade partners in China as well as other key markets around the world,” Zhang told investors.

“We are closely monitoring the latest shift in US government policies towards Chinese companies which is a very fluid situation. We are assessing the situation and any potential impact carefully and thoroughly, and will take necessary actions to comply with any new regulations,” he added.

At the same time the Hangzhou-based company said sales from its commerce business rose 34 percent in the three months ending in June, compared to a year ago.

Alibaba’s shares have soared by more than 20 percent this year as investors around the world poured money into technology companies seen to have benefited from people staying at home during the coronavirus pandemic.

Alibaba’s strong results mirror China’s economic rebound post the pandemic.

In fact, the company said as much during its earnings callattributing the jump in revenue to China’s “effective management” of the outbreak in much of the country.

But there’s also the fact that the coronavirus fundamentally changed consumer behaviour in China.

In the midst of lockdowns, people flocked online to buy things like yoga mats and face masks.

Since then, as Chinese consumers came out of quarantine, there was a big rise in, for example, cosmetics sales.

But the pandemic also pushed more people online to buy their groceries, and it’s a trend that’s continued in a post-coronavirus China.

Still a rebound isn’t a recoveryyet. And while Alibaba’s recovery depends mainly on the fortunes of the Chinese market, tensions between Beijing and Washington will weigh on both its and China’s growth prospects.

Trump’s China crackdown

The placatory comments from Alibaba’s boss came in a week that has seen Trump using his election campaign speeches to threaten further action to push back against China.

At an event in Pennsylvania on Thursday he said that if he is re-elected, Washington will impose tariffs on American companies that refuse to move jobs back to the US.

“We will give tax credits to companies to bring jobs back to America, and if they don’t do it, we will put tariffs on those companies, and they will have to pay us a lot of money,” he said.

That came on top of the president’s pledge earlier this week to offer tax credits to entice US firms to move factories out of China.

He also threatened to strip US government contracts from companies that continue to outsource work to China.

https://finance.yahoo.com/news/chinas-alibaba-offers-olive-branch-032125056.html

 

Category: China

Print This Post

Comments are closed.