Jack Ma: Don’t oppose the real economy and the virtual economy

On the morning of November 14th, Ma Yun delivered a speech at the Zhejiang Business Conference, where he gave a speech for China’s economy. Wall Street had previously forecast a double-11 growth rate of 20%, they believe that China’s consumption is weak, China’s economy is in recession, “and in fact, double 11 growth rate is 25.7%, some people also doubt whether the data is false, I assure you, the data age can not be faked every point.”

Ma Yun’s Speech Pieces at the 5th World Zhejiang Business Congress

Jack Ma: Don't oppose the real economy and the virtual economy

He even said that this year’s double 11 is actually mainly affected by two disturbances, one is too hot, one is Monday, i hope that the next double 11 countries can give half a day holiday. “There was laughter in the applause.

“Double 11 is not Ali’s success, it is the success of Domestic Demand in China, ” Mr Ma said. “Today China’s domestic demand gives us a lot of confidence, and all this has just started, Ma Yun predicted that the next domestic demand is China’s once-in-a-lifetime, once-in-a-century gold mine.

How to explore this once-in-a-century “gold mine”, Ma Yun as an entrepreneur talked about his thinking about china’s economy.

First, he suggested vigorously developing modern finance and building a new financial system for the future. Banks’ aorta works well, but today’s Chinese finance still lacks capillary systems. In addition, we should really develop modern service industries. Mr Ma reckons that in the future, job creation is dying not for manufacturing, but for modern services. Finally, Mr Ma also called on ministries to introduce more real policies rather than documents. In his view, the document is more a provision can not do so, can not do so, and the policy is to stimulate people’s enthusiasm, stimulate people’s efforts to encourage the development of new things.

In the face of the host Dong Wei repeatedly asked, “isn’t the entrepreneur to make money?”, Ma Yun can not help but correct, “the community of business entrepreneurs have a great misunderstanding, always feel that entrepreneurs want to make more money, this is a huge misunderstanding.” “For entrepreneurs, Jack Ma wants to give them a “proper name”, “Actually I see in them feeling, not how to make money, but how to face the challenges of the future.” Ma’s remarks won a standing ovation from thousands of entrepreneurs.

The following is the full text of Jack Ma’s speech:

Hello, representatives of Zhejiang businessmen!

The biennial Zhejiang Business Conference has become an important time for Zhejiang businessmen to think, communicate, learn and discuss together.

The world is changing dramatically, technology is changing rapidly, and China’s progress is rapid. All these changes will have a profound impact on each of our enterprises, affecting our Zhejiang businessmen. Tomorrow in the end where our business can go, the key is in the vision, the future judgment, is not able to see the change, whether it can grasp the change.

Recently, I believe that all enterprises are worried about the economy, are worried about the future direction of the economy, are worried about whether their enterprises can go through this. We all seem to be looking forward to something, waiting for something. But waiting and waiting is not as much as doing more. In fact, people are easy to be affected by society, when people say bad, you are in a bad mood. In fact, when everyone says bad, you calm down at this time is to see a lot of opportunities.

I didn’t advertise for Alibaba and Double 11 here, but just past the double 11 showed some interesting phenomena and changes, I want to give you some inspiration, because it also confirms our views on some issues.

The number of double 11 the day before yesterday was more than expected and exceeded everyone’s prediction of today’s economic situation. Wall Street has a forecast that double-11 will probably grow by about 20%, indicating that China’s consumption is sluggish and that China’s economy is in recession. But our numbers actually grew by 25.7%. There is even speculation as to whether the data is false. I assure you that in the age of data, in the age of the Internet, every penny is extremely accurate.

Despite this, what I want to tell you is that this year’s double 11 can actually be a little better. There are two reasons, one is the weather is too hot, the weather is cold, clothing will sell better, from the figures in Zhejiang, not too good, last year was the second, this year became the third, mainly winter clothes did not start. Another point, this double eleven is Monday, can not stay up late, so we hope that the future double 11, the country can have a half-day holiday.

The 268.4 billion in 2019 is 5,000 times higher than the 50 billion in 2009. There are 1.29 billion packages, a month and a half in the United States, the equivalent of the entire country in 2007. Now, China as a whole has 60 billion packages a year, an increase of one More than the United States every year.

But in fact, I personally feel that the double 11 is not Alibaba’s success, in fact, the success of double 11 is the success of domestic demand in China. China’s economy is difficult today, but domestic demand has given us great confidence. China’s domestic demand has not been tapped, we see here today, the domestic demand, just started. China’s domestic demand is a once-in-a-lifetime gold mine. I would also like to tell you that the troika of the past, we focus on infrastructure investment, exports, these two governments can do a good job, but domestic demand depends on enterprises, driven by the market economy to do.

From today’s situation, neither the Government nor the enterprises, including ourselves, all of us here, have really realized the potential of domestic demand, the impact of domestic demand on the economy. We have not adjusted from the production relationship, today many departments of the country set up, local provincial governments, including our internal system, system and department settings, still in accordance with the original infrastructure construction, export-oriented. Today’s double 11 is actually just a very small number of enterprises embrace the change, change themselves, adapt to the market, only a few enterprises have achieved great success. If all our businesses really change themselves according to demand, the economic potential of domestic demand is huge.

Double 11 numberist is not really key, the key is the real power behind the number, the power of technology, the power of Innovation in China’s manufacturing industry, the power of business change. So I personally think that double 11 is not a digital event, but an event of innovative power.

In addition, a lot of people against e-commerce, I am no longer doing e-commerce, e-commerce itself in Alibaba has become a traditional business. However, the great changes that e-commerce has brought to China are not deeply realized by many companies.

First, the new technology driven by e-commerce strongly supports the development of the real economy. As you know, Alibaba’s e-commerce chamber alone sold nearly $1 trillion this year, more than 80 percent of which is produced by China’s real economy. Without the e-commerce channel, it’s hard to imagine that these companies’ products would be sold. Today, since there are so good channels of marketing, we Zhejiang businessmen to make good use of.

Second, the miracle of the logistics industry. China’s logistics costs are the most expensive in the world, but China has the best airports, the best high-speed rail, the best highways, and we invest the most in logistics infrastructure, but we have the highest logistics costs. However, in a short period of ten years, through the power of the market, the power of private enterprises, to establish the world’s most powerful and most advanced logistics system. Today, this express logistics system can handle 60 billion packages a year.

Third, pay the miracle. Outside the traditional banks, a modern and powerful mobile payment system has been established. As a result of the application of big data and AI, sMEs received more than 300 billion yuan in loans for stocking throughout the double 11 period.

In addition, there are also huge changes to the real estate industry. The original downtown shops are particularly expensive, after the emergence of e-commerce, the price of shops fell, with market means to reduce real estate. Hope that our country still attaches great importance to the development of the real estate industry, because it is driving the entire economic chain of important factors, through market means to improve.

So I think we’re facing three huge changes in the future: the first is technological change. Technological change will bring about financial change, logistics change, production mode change and transaction mode change.

The second is that in the next decade, the world’s trade rules will change, digital currencies will bring about changes in the financial system, and the world landscape will change because of technology.

The third is that China has gone from being an export-oriented country to a consumer country, and the change will be huge.

Therefore, for our Zhejiang businessmen themselves, I think in the current new economic situation, I still want to emphasize the future view, the global view and the overall view. Looking at the future, we must embrace high-tech, the future does not belong to Internet companies, the digital economy is indispensable, the future belongs to the embrace of the digital economy, embrace the Internet economy of enterprises. Not all businesses will have to transform in the future, but all businesses in the future will have to upgrade.

Second, we must move from export-oriented to consumption-oriented, Zhejiang businessmen from the export-oriented development, if not become consumer-oriented, domestic demand-oriented, many Zhejiang businessmen will certainly die. Today, China’s main consumer force is small-town youth, this year double 1134, 55and 6th-tier city consumer population, consumption amount growth rate for the first time at the same time exceeded the first line, online shopping new users 60% to 70% from the third, fourth and fifth-tier cities and rural areas, the United States with 300 million people to pry the global economy, China has 1.4 billion people, 300 million middle-income people will certainly be able to pry China’s economy and drive the world economy. Investment, export I think is the government’s strength, consumer economy is the strength of enterprises. The eyes of enterprises from the outside quickly into an inside look, to do a good job of the local economy, which is more important than anything else.

The third is to develop advanced manufacturing and modern service industries. In the past 40 years, China has become a manufacturing power, and Zhejiang merchants have gone the world with their manufacturing capabilities. In the future, Zhejiang businessmen should rely on advanced manufacturing and modern service industry to go the world. Therefore, we hope that Zhejiang businessmen can really pay attention to the Belt and Road, into the Belt and Road. A new round of globalization is taking shape, and new trade patterns, trade rules and trade opportunities are bound to emerge within the next decade. Global trade will be consumer-driven, driven by new, customized manufacturing, and the container trade of the future will become a package. Ten years ago, the average value of our B2B orders was $50,000, but now Alibaba B2B orders have dropped to $5,000, and it’s likely that future global trade is $500 or even $200 per order. In the past, globalization is dominated by large enterprises, the future globalization is a good enterprise-led, only good products, good service, good experience, good for others can go better. Therefore, no matter which country today, we have to think about a problem, new technologies, new trade patterns, new world patterns, each country must adjust its production relationship to adapt to the new productivity. Which country can adjust its production relationship and which company can adjust its internal production relationship, and it can grasp the future. We need to truly recognize that our economy is undergoing fundamental changes, and we have not been able to adapt to the consumption-oriented economy in accordance with the original set of adaptation to investment and export.

Therefore, I also hope to give some advice to all sectors of the community, and all people concerned about the economy to share some thinking. Economic development needs experts, scholars, regulation to work together, supervision not only to listen to economists, but also to listen to entrepreneurs.

So My suggestion: First, we propose to develop modern finance vigorously. Our finance is not simply loose, money- or simply austerity, but the need to reform the backward financial system and build a new financial system for the future. China’s financial aorta does very well, but it lacks a capillary system. We must build a modern financial system for the future and support the consumption-driven economy of China as a whole in the future. Today’s highway, is not based on the construction of village and town highway, high-speed rail is not based on the green railway, express delivery is not based on China Post, the future of finance, is for digital finance, whether it must be built in accordance with yesterday’s financial system, I think it is worth thinking.

Second, we should not oppose the real economy and the virtual economy, nor should we make the real economy’s formulation slogan seditand and correct. What is the real economy, the real economy refers to the advanced manufacturing industry plus modern service industry, we must support the advanced manufacturing industry, but also strengthen the elimination of backward manufacturing industry. Really vigorously develop modern service industry, because China’s 1.4 billion people, if not the development of modern service industry, China’s future employment will be quite difficult. In addition, we also call on all departments to really introduce policies, not documents, innovative services to stimulate consumption, expand employment, as the main means and objectives.

The economy is to operate, the market depends on the operation, the economy depends on the business. Transport is the allocation of resources, camp is the sense of efficiency. Market economy is not by management, the tube is out of the question call, the reason is out of the mess to reason. We want to run our economy, and we want our policies to be a little bit more and less documented. There is a difference between documents and policies, documents are stipulated that they cannot be done, that they cannot be done, and that policies need to be linked up and down, to stimulate people’s enthusiasm, to stimulate people’s efforts, and to encourage the development of new things. Therefore, for new things, consumption-driven, domestic demand-driven economy, the emergence of a lot of new things, more protection less restrictions. Rules are not equal to limitations, and facilitation promotion is an important part of the rules. Regulation is for healthy development, leaving the development of regulation without doubt. Development does not necessarily bring risks, regulation does not necessarily have to be riskless, and sometimes inappropriate and backward regulation is a huge risk. Therefore, today we only regulatory authorities, only market players, entrepreneurs, economists, we work together, our economy in the face of extremely complex situation at home and abroad, can still be full of great vitality. The domestic demand of 1.4 billion people, China’s unified economy, and the enormous infrastructure that China has invested in over the past three or four decades have brought unprecedented hope and future to the world and to its own country. Therefore, we hope that the Government to drive consumption and expand employment by innovative services as the main means and objectives, because I think we will only strengthen our own country’s market, mainly the Chinese market, we will face the future.

Today we just talked about inheritance, science, culture, I think it’s very important. Inheritance, including what Xiaohe said just now, is labeled by the next generation. I think it’s better to have a label than someone without a label. We’re going to inject a new meaning, a new definition, into this label. From the dialogue just now, I sit there very much feeling, 20 years, 10 years ago, I will never be as young people as today can ask such a question, can be so open to social pressure. So I believe that china’s young people, China’s next generation, the next generation of Zhejiang businessmen, will certainly surpass us. In the process of doing our own business, we pay more attention to the training of talents, the establishment of a system, the establishment of a cultural system suitable for the development of these talents, Zhejiang businessmen will have the future. Therefore, in the economic situation is not good, especially to learn, especially to communicate. Learning and communication, not let you copy others, but to think about what they want, what, give up what and insist on what.

Thank you!

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