Slower economic growth in China and heightened worldwide concerns about security shouldn’t lead investors to overlook the potential of the Asia region, Alibaba Chairman Joe Tsai said at discussion organized by the Asia Society in New York on Thursday.
“Asia is a big place,” Tsai said of the vast, varied continent. “But I think a lot of the cultures in Asia are quite similar in that people are industrious, and these economies have provided very high levels of education to the population.”
He continued: “The question you should ask investors is: Do you want to bet against people in Asia?”
“We’ve seen a slowdown in China of the economy, but there’s a ton of industrious people, and people working on new technologies,” Tsai said. “Asia is still a very dynamic place.”
Tsai, 59, spoke on “Leadership in a Fragmenting World” alongside Morris Chang, the 92-year-old founding chairman of Taiwan Semiconductor Manufacturing. The two rank among the world’s most successful businesspeople: Taiwan-born Tsai, a Canadian national, has a fortune worth $7.6 billion on the Forbes Real-Time Billionaires List, and mainland China-born Chang, a U.S. citizen, is worth an estimated $2.2 billion. Chang was feted by Forbes in 2017 as one of the world’s greatest living business minds for his contributions to the chip industry. (See related post here.)
Chang lauded the excellence of higher education in the U.S., though also expressed concern about how the country will manage growing competition from rising China. Decoupling between the two is under way today in the semiconductor field, and “our only hope is that it doesn’t lead to anything even more serious.”
“Decoupling will ultimately slow down everybody,” Chang said. “The immediate purpose of course is to slow China down, and I think it’s doing that” in chips. “Ultimately, I think it will be harmful to everybody.”
“There are a couple of reasons that are driving the decoupling,” Tsai said. “Governments around the world are worried about security – national security. And also they’re worried about digital security.”
For those reasons, supply chains are being decoupled, Alibaba’s chairman said. “We also see a lot of fragmentation in the digital world.”
Tsai said communication among businesspeople in the U.S. and China is particularly important today. “The world is very dangerous and so unpredictable. I worry about these hot conflicts,” he said. “I hope that the two largest economies in the world somehow accidently or by purpose get into a hot conflict,” he said.
“It used to be that businesspeople just minded their own business,” focused on a fiduciary obligation to their shareholders, stayed out of the press, “and that’s it,” Tsai said. “But I think we live in a much more complex geopolitical world where communication is absolutely important,” he continued.
“Businesses from both the U.S. and China need to communicate with each other. Without communication, there is a lot of room for misunderstanding. If you have misunderstanding, then you let the lack of trust accumulate, and that could create a lot of conflicts. And so I think it behooves even people in business to travel a lot, talk to different communities in different countries, and share their viewpoints. Even if you argue with each other, I think it’s a good thing. Communication is so key to increasing understanding, which ultimately leads to trust-building and a peaceful world,” Tsai said.
The two ruminated about turning points in their success. Chang worked for a quarter-century at Texas Instruments and then joined the Industrial Technology Research Institute, a research body that spun off TSMC. Tsai, who holds a law degree, switched into e-commerce from private equity and the legal field, becoming a co-founder at Alibaba. “I got lucky. I met Jack Ma in 1999 through a friend’s introduction,” and in a Hangzhou apartment crossed paths with a roomful of young, “wide-eyed” disciples of the charismatic entrepreneur. “The rest was history,” he said. Tsai owns the Brooklyn Nets NBA team.
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