Alibaba CEO Jack Ma discusses 1 million jobs with Trump

Alibaba's boss chats with Trump about creating 1 million US jobs

U.S. president-elect Donald Trump had a "great meeting" with Alibaba (BABA) executive chairman Jack Ma on Monday, when they were scheduled to discuss plans to create 1 million new U.S. jobs over the next five years.

"Jack and I are going to do some great things," Trump said from Trump Tower in New York City.

"We're focused on small business," Ma told reporters.

The Monday meeting was planned to focus on the Chinese e-commerce company's U.S. expansion plans, according to spokespeople for both Alibaba and Trump. Ma had planned to be in New York City on Monday and the scheduling worked out for the meeting, a source told CNBC.

Ma did not confirm a specific number of jobs to reporters after the meeting, but said that he would go through the small business community to focus on agriculture products, especially in the Midwest.

"We also think that the China and USA relationship should be strengthened — should be more friendly," Ma said. "The door is open for discussing the relationship and trade issues. I think the president-elect is very smart, he's very open-minded to listen. I told him my ideas about how to improve trade, especially to improve small business, cross border trade."

The meeting comes amid tensions between China and the incoming Trump administration. Trump has proposed steep tariffs on trade with China, and has incited political controversy over the U.S. relationship with Taiwan.

But Trump has also been critical of Amazon (AMZN), which like Alibaba, offers cloud services and a marketplace for third-party sellers. Trump has said Amazon will have "such problems" during his presidency, because of their tax structure.

Amazon had about 230,800 employees as of the end of 2015, though it creates other jobs through its sellers, contractors and supporting services. Alibaba, which focuses more heavily on enabling third-party sellers, had 36,446 full-time employees as of March 31, 2016, according to SEC filings.

Ma told CNBC last year that he wasn't worried about anti-China sentiment on the presidential campaign trail.

"Somebody has to stand up and say hey, we should not be anti-trade," said Ma.

Alibaba's wide-ranging set of international businesses, from financial services to e-commerce to logistics, have managed to dominate many of America's tech companies in China.

"I believe that ... foreign technology companies will be successful in China," Michael Evans, president of Alibaba Group, said at Vanity Fair's 2016 New Establishment Summit in San Francisco in the fall. "I also believe that Chinese technology companies, including Didi, probably Alibaba, will be successful in the U.S. and Europe. But that is the challenge and the most difficult parts of globalization for us."

Evans, who knows Trump personally, may have brokered Monday's meeting with Trump, a source told CNBC.

If an expansion is announced, Alibaba would be the latest in a string of companies to commit to create U.S. jobs in the wake of Trump's election. Japanese tech giant Softbank also reiterated a commitment to create 50,000 U.S. jobs after meeting with Trump.

Still, Alibaba has a complicated relationship with U.S. regulators. The company faced an SEC investigation about its accounting methods last year, and its property, Taobao, has been rebuked by American trade officials for allowing sale of counterfeit goods.

President-elect Donald Trump with Jack Ma, founder and executive chairman of Alibaba Group (Photo: Timothy Carly, AFP/Getty Images)

Donald Trump: 'Great meeting' with Alibaba's Jack Ma

SAN FRANCISCO —Alibaba executive chairman Jack Ma met with president-elect Donald Trump on Monday to discuss Ma's plans to create 1 million U.S. jobs by growing trade between U.S. small businesses and Chinese consumers.

"It was a great meeting," Trump told reporters at Trump Tower. He also called Ma "a great entrepreneur, one of the best in the world."

"He loves this country and he also loves China," Trump said. "Jack and I are going to do some great things."

Monday's meeting, which came amid growing tensions between China and the incoming Trump administration, focused on the Chinese technology giant's plans to expand in the U.S., especially the Midwest, and strengthening relationships between China and the U.S., according to Ma.

An editorial in Chinese state media this month warned Trump that he risked "big sticks" if he starts a trade war with China.

"There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door — they both await Americans,” the Communist Party’s Global Times newspaper wrote in the editorial responding to the appointment of Robert Lighthizer as U.S. trade representative. Lighthizer is a former trade official in the Ronald Reagan administration who has criticized China on trade. Trump also named Peter Navarro, a UC Irvine economics professor and China trade critic to run a White House National Trade Council.

"It was a very productive meeting," Ma told reporters. "The door is open to discuss the relationship on trade issues."

Ma specifically mentioned agricultural products such as wine and fruit that could be sold through Alibaba to consumers in China and Asia.

Details of the plan are vague. Alibaba spokesman Robert Christie declined to comment.

Alibaba had previously positioned China as a massive market for American goods that could create U.S. jobs, but had not pegged how many U.S. jobs it thought that its expansion would create.

Last year Ma said he envisions 40% of Alibaba's business to be outside China in the next 10 years.

"$BABA wants to create US jobs by helping US small businesses and farmers sell to China's 300 million-strong middle class," Alibaba tweeted Monday.

Ma first outlined the expansion plans in a Wall Street Journal editorial in June 2015. Alibaba aspires to be the digital platform through which all international retailers gain access to Chinese consumers. Alibaba controls about 80% of China’s online shopping market with marketplaces such as Taobao and T-Mall.

"We want to help U.S entrepreneurs, small business owners, and brands and companies of all sizes sell their goods to the growing Chinese consumer class. Chinese consumers will get to buy the American products they want. This, in turn, will help create American jobs and increase U.S. exports," Ma wrote at the time.

On the campaign trail, Trump pledged to limit global trade, taking aim at China. Steep tariffs on Chinese goods could undercut Alibaba's AliExpress service which lets Chinese retailers sell to U.S. consumers and U.S. brands to sell to Chinese consumers. Alibaba last month was placed back on a list of counterfeit marketplaces by the United States Trade Representative over sales on its Taobao marketplace of fake and pirated goods, a move that could also dampen international sales.

"The purpose of Jack Ma’s visit was to frame Alibaba’s business with the U.S. in a framework Donald Trump understands, as an innovative company that is creating jobs for both Chinese and Americans," Scott Kennedy, director of the Project on Chinese Business & Political Economy at the Center for Strategic & International Studies, said in an email. "Alibaba’s future, in part, will depend on expanding international trade and limiting protectionism and reducing trade barriers is in its deep self-interest."

Alibaba has benefited from constraints on foreign companies in China, Kennedy said.

"My guess is that Alibaba wants to highlight how it is different from Chinese state-owned enterprises in steel and other traditional sectors, areas that appear the Trump administration is most likely to target for sanctions as part of its effort to open up China’s markets further to U.S. goods and investment," he said. "However, Alibaba’s situation is actually more complex than the contrast it aims to highlight."

Ma is not the first Asian entrepreneur to appeal to Trump with the promise of U.S. jobs.

SoftBank CEO Masayoshi Son, a Japanese billionaire and technology investor who backed Alibaba, met with Trump last month.

Softbank said at the time that it plans to invest $50 billion into the U.S. economy, and add 50,000 jobs. The Japanese company has a majority stake in Sprint, whose plans to merge with rival T-Mobile were thwarted by the Obama Administration. Son did not say what specific investments SoftBank would make but they were part of a previously announced $100 billion tech investment fund.

"Masa said he would never do this had we (Trump) not won the election!" Trump tweeted after the meeting.

Trump speaks with Alibaba's Jack Ma about what else? Jobs

One surefire way to get an audience with Donald Trump appears to be the promise of American jobs, even if you’re one of China’s leading pariahs in the eyes of U.S. trade officials. 

Jack Ma, founder of Alibaba Group, met with the president-elect Monday at Trump Tower to pitch plans on how to create 1 million American jobs by helping small businesses sell to China.

“A great, great entrepreneur; one of the best in the world and he loves this country and he loves China,” Trump told reporters after the meeting. “Jack and I are going to do some great things.”

The meeting comes less than three weeks after the Office of the U.S. Trade Representative returned Alibaba to the list of “Notorious Markets” that engage in rampant copyright piracy and trademark counterfeiting — a major slap in the face for a company that still holds the record for largest IPO when it listed in New York in 2014.

The agency said Alibaba’s leading e-commerce platform, Taobao, has made strides cracking down on fakes, but that levels of the goods remain “unacceptably high” and pose a risk to consumers.

Still, a pledge to create American jobs would help counter one of Trump’s chief concerns about the U.S. relationship with China — namely that the yawning trade gap was stifling employment at home.

In recent years, China’s strengthening middle class has increased demand for U.S. products such as fresh fruit, cosmetics and baby supplies, Alibaba says. The company even invested in a warehouse in Southern California to more efficiently ship American goods to China.

“Providing Chinese consumers with access to goods made outside of China has long been a key strategy for Alibaba,” the company said in a statement Monday.

Trump has been nothing short of confrontational about China, both as a presidential candidate and president-elect. The celebrity businessman has blamed China for fabricating climate change and eating America’s lunch when it comes to trade. That’s created a cloud of uncertainty about how the countries will proceed, particularly in business, once Trump takes office.

Given the mood, Alibaba initially suggested Washington was politically motivated in its decision to place the company on the “Notorious Markets” list last month.

“Our results speak for themselves,” Alibaba Group President Michael Evans said in a statement at the time, which highlighted how the company had more than doubled the number of counterfeit listings it booted off its platform in the last year. “Unfortunately, the USTR’s decision leads us to question whether the USTR acted based on the actual facts or was influenced by the current political climate.” 

Alibaba shares were up about 1% by mid-afternoon.

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