With the threat of Trump’s ever-looming trade war with China and his administration’s sanctions on Chinese companies like ZTE, it’s hard to remember a more contentious period between the two countries in recent times. It’s an issue Alibaba vice chairman Joseph Tsai touched on at the Recode Code Conference yesterday. Tsai addressed China’s ambitious China 2025 manufacturing plan:
“What’s happening right now is, over the last 30 years, China has been a manufacturing country, but it’s focused on . . . A lot of the manufacturing is low-end apparels. We’re assembling iPhones and making $20 per phone, while Apple, with all the IP and the technology, makes $600 of profits on an iPhone, right? So, there’s a recognition by the government of China that we need to upgrade our technology. We need to upgrade our manufacturing sector, focus more on higher value-end manufacturing, things like robotics, aeronautics, high-tech medical equipment. That’s part of the China 2025 manufacturing plan.”
Tsai went on to say that many people in America want to stop China from achieving its plans for improving its manufacturing infrastructure, including Senator Mark Warner who had previously voiced concerns that Alibaba is deeply penetrated by the Communist party in China:
“There’s nothing wrong with a country wanting to upgrade its own manufacturing sector, go higher tech, be more innovative. But then, from the Chinese perspective, what we’re seeing is, there are a lot of people in America that want to stop China from doing that. So, that’s kind of an unfathomable . . . You know, we’re wondering why that’s the case, and I think Senator Warner’s in that camp. They want to hold China back. I still don’t understand it. I would disagree with this characterization of Chinese companies.”
Earlier in the day, Senator Warner told an audience at Code Conference that “in tech, Chinese are operating in a different rule book than we are. The major Chinese tech companies–Alibaba, Baidu Tencent . . . they are all penetrated deeply by the Communist party. At the end of the day, they owe as much allegiances to their government as they do their shareholders.”
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