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Jack Ma scraps his pledge to create a million U.S. jobs. But was it ever serious?

Jack Ma had pledged to create a million U.S. jobs by enabling small U.S. businesses to reach more Chinese customers, not by employing Americans directly.
Jack Ma had pledged to create a million U.S. jobs by enabling small U.S. businesses to reach more Chinese customers, not by employing Americans directly.
(Pool photo)
The Washington Post

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 then-President-elect Trump create a million American jobs.

Now Ma has retracted the pledge, saying the escalating U.S.-China trade war has wrecked it.

“The promise was made on the premise of friendly U.S.-China partnership and rational trade relations,” the celebrity billionaire told Chinese state media 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 Ma’s offer had been serious in the first place.

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

In January 2017, Alibaba — Asia’s largest online retailer, valued at $500 billion — announced it would create a million jobs in the United States over the next five years.

The pledge followed Ma’s high-profile visit to Trump Tower in New York, where, according to Trump administration officials at the time, Trump and the Chinese businessman discussed how Alibaba “can create 1 million U.S. jobs by enabling 1 million U.S. small businesses to sell goods into the China and the Asian marketplace.”

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

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Right away, it was clear: These would not be direct jobs — Alibaba employs a comparatively minuscule 66,000 or so full-time workers. Rather, Ma forecast that the company would enable U.S. sellers to reach more Chinese consumers, fueling a spike in entrepreneurial employment.

Data on jobs tied to trade tell a different story.

U.S. exports of goods and services to China would have to jump $206 billion — more than doubling — in order to create a million American jobs, according to figures from the Commerce Department.

Last year, the value of those exports was $188 billion total — and current American exports feature items Alibaba can’t sell, including education services and aircraft, said Derek Scissors, a China economy scholar at the American Enterprise Institute in Washington.

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“If all tariffs went to zero, we’d still be waiting a long, long time for Ma to fulfill his pledge,” Scissors said.

Trump had embraced Ma’s promise as an early win for his administration. The president had campaigned on “bringing back” U.S. jobs lost to the forces of globalization, 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,” Trump told reporters.

China business observers raised an eyebrow.

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“Theatrics,” Duncan Clark, author of “Alibaba: The House That Jack Ma Built,” said a year ago.

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

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

Alibaba did not respond for requests for comment.

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Kroeber, the China consultant, said Ma’s Wednesday statement probably is sending another sort of message.

“He’s signaling that he no longer believes that constructive engagement with the U.S. is possible,” Kroeber said.

Beijing vowed Tuesday to immediately strike back at Trump’s next avalanche of tariffs on $200 billion worth of Chinese imports, which will take effect Monday, with duties on an additional $60 billion worth of American goods.

Trump has said such retaliation would compel him to slap levies on an additional $267 billion worth of Chinese products, effectively placing higher border taxes on everything the United States buys from China.

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As the commercial battle intensified this month, Ma announced he planned to step down next year from his role as chairman at Alibaba. He said the increasingly chaotic international business climate had nothing to do with that.

Paquette writes for the Washington Post.


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