Jack Ma's vow to create 1m US jobs just an act?

Ma (above) said his pledge had been made on the basis of continued cooperation and trade growth between the US and China.
Ma (above) said his pledge had been made on the basis of continued cooperation and trade growth between the US and China.PHOTO: BLOOMBERG

BEIJING • Chinese technology titan Jack Ma emerged from a meeting at Trump Tower last year with a bold promise: his e-commerce giant Alibaba would help US President Donald Trump create a million American jobs.

But now Mr Ma has retracted the pledge, saying the escalating trade war has wrecked it.

"The promise was made on the premise of a friendly US-China partnership and rational trade relations," the celebrity billionaire told Chinese state media on Wednesday. "That premise no longer exists today, so our promise cannot be fulfilled."

Analysts say this retraction would have been a loss for America's workforce - if Mr Ma's offer had been serious in the first place.

"It's pretty obvious that Ma's original pledge was political theatrics, not a serious promise," said Mr Arthur Kroeber, a founding partner at Beijing consultancy Gavekal Dragonomics. "It was part of a Chinese effort to butter up Trump early in his tenure."

In January last year, Alibaba - Asia's largest online retailer, valued at US$500 billion (S$682 billion) - announced that it would create a million jobs in the United States over the next five years.

The pledge followed Mr Ma's high-profile visit to Trump Tower in New York where, according to Trump administration officials at the time, Mr Trump and the Chinese businessman discussed how Alibaba "can create one million US jobs by enabling one million US small businesses to sell goods into the China and the Asian marketplace".

Mr Ma had said he wanted to boost small businesses, particularly in the US Midwest, and help workers like farmers and clothing makers connect to a larger market. Alibaba has performed similar outreach to rural merchants in China.


Right away, it was clear: These would not be direct jobs - Alibaba employs a comparatively minuscule 66,000 or so full-time workers.

Rather, Mr Ma forecast the company would allow US sellers to reach more Chinese consumers, fuelling a spike in entrepreneurial employment.

Data on jobs tied to trade tells a different story.

US exports of goods and services to China would have to rise a staggering US$206 billion in order to create a million more American jobs, according to figures from the US Commerce Department.

Last year, that figure was US$188 billion in total - and current American exports feature items Alibaba cannot sell, including education services and aircraft, said Mr Derek Scissors, a China economy scholar at the American Enterprise Institute in Washington.

"If all tariffs went to zero, we'd still be waiting a long, long time for Ma to fulfil his pledge," Mr Scissors said.

Mr Trump had embraced Mr Ma's promise as an early win for his administration. The President had campaigned on "bringing back" US jobs lost to the forces of globalisation, and businesses scrambled to give him credit for their expansion plans on American soil - even if some blueprints came together years before he sought office.

"Jack and I are going to do some great things," Mr Trump had told reporters.

China business observers, however, raised an eyebrow. "Theatrics," Mr Duncan Clark, author of Alibaba: The House That Jack Ma Built, told The Washington Post a year ago.

"Who knows what he meant then or now," said Ms Anne Stevenson-Yang, co-founder of J Capital Research in Beijing, about Mr Ma's recent reversal.

"Jack Ma is a master of marketing and very adept political operator," said Mr James McGregor, chairman of the greater China region for the consultancy Apco Worldwide.

Alibaba did not respond to requests for comment.

Mr Kroeber, the China consultant, said Mr Ma's statement is likely sending another sort of message. "He's signalling that he no longer believes that constructive engagement with the US is possible," he said.


A version of this article appeared in the print edition of The Straits Times on September 21, 2018, with the headline 'Jack Ma's vow to create 1m US jobs just an act?'. Print Edition | Subscribe