Alibaba Group chairman Joe Tsai says he has a “glass half full” attitude as trade tensions between the US and China escalate into a trade war. Tariffs, according to him, are a “negotiating tool” and “at some point, things will sort of get better”.
Tsai says the Chinese e-commerce and cloud computing giant sells US$50 billion ($66.69 billion) worth of American products and US$30 billion worth of European products to China each year. Naturally, the multinational company is concerned about the impact of tariffs on its earnings.
“There’s a lot of import and consumption going on in China of foreign-branded products, and so of course, we worry about potential tariffs,” adds Tsai, who is one of the co-founders of Alibaba.
Still, the Taiwanese-Canadian billionaire thinks it’s “way beyond our pay grade to talk about it”. “It’s really about the leaders of countries getting together and deciding that, ultimately, tariffs create too much friction, and some level of global trade and interaction between companies is good.”
Tsai, who has a net worth of some US$11.9 billion according to Forbes, adds: “I think the Trump administration will want to have more American companies doing business in China and making money there, right?”
Speaking at CNBC’s inaugural Converge Live summit at Jewel Changi Airport, Tsai acknowledges that some “protected industries” will still be subject to tariffs. “All these Chinese electric vehicle sectors exporting to the rest of the world, I would expect that some tariffs are going to be put on them. They’ll increase the cost of people buying that.”
The Chinese consumer
China achieved 5.0% GDP growth in 2024, and its leaders appear confident that it can repeat this in 2025. Last week, China set an unchanged GDP growth target of “around 5%” for the current year.
Exports drove China’s growth last year, says Tsai, but the impact of tariffs and geopolitics will weaken the export sector this year. “What’s left is that domestic consumption needs a boost. We hope after the Two Sessions that the [Chinese] government is working on a number of stimulus measures. We haven’t seen all the details yet, but we hope that at some point they will come out to really favour promotion of consumption.”
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The Chinese consumer is “very, very healthy”, says Tsai, and China’s household balance sheet is “very, very strong” — at “over US$20 trillion of bank deposits”. “They’re standing on the sidelines waiting to spend.”
Chinese consumers are waiting for greater confidence and positive sentiment, adds Tsai, and people “underestimate” the importance of President Xi Jinping’s meeting with Chinese entrepreneurs last month.
The meeting gave private entrepreneurs the confidence to invest in their businesses — Alibaba included. In February, the company announced plans to invest at least 380 billion yuan ($69.79 billion) in its cloud computing and artificial intelligence infrastructure over the next three years.
Tsai sees a flywheel effect in China with technological breakthroughs like DeepSeek. “That sort of combination of private business confidence and excitement about technology development will eventually translate into consumer confidence. Why? Companies are hiring people again, companies are growing again and, ultimately, that’ll trickle through consumer confidence.”
