Opinion / Op-Ed Contributors

Alibaba a new link in China-US ties

By Li Zheng (China Daily) Updated: 2014-09-09 07:39

Alibaba and some of the other Internet companies have chosen the US and Hong Kong to list because the international rules of business are better suited to their long-term development. And by listing overseas, they can compel their domestic business partners to abide by the same rules to avoid legal disputes or damage to their reputation.

Alibaba's IPO launch on the NYSE also shows that the common interests of China and US are increasing, which, in turn, could help stabilize economic relations between the two countries. Alibaba is a model of a multiple-stakeholder company, whose owners include Softbank and Yahoo with the founding team being from China. After the IPO, more investors from the US and China are likely to join Alibaba, and the resultant economic interests will make investors an important force in stabilizing and promoting China-US relations, and make the company a new link between the two sides.

Besides, with companies such as Alibaba listed on the NYSE, China and the US will be more cautious while taking decisions that could affect bilateral relations and thus harm people's interests on both sides.

Moreover, Alibaba's IPO shows that China's economic rise will not only benefit the Chinese people, but also create more opportunities for the US and the rest of the world. Alibaba is an attractive company with growing earnings. As the leader of China's e-commerce sector, Alibaba earned more than 23 billion yuan ($3.75 billion) in the 2013-14 fiscal year, up 170 percent year-on-year.

In addition, Alibaba owns Yuebao, the biggest monetary fund in China. Since e-commerce has not yet caught on in rural areas and many cities, Alibaba still has a long period of growth ahead. So, Alibaba's listing and the deepening of reform in State-owned enterprises should be seen as a signal from China's leadership that it is ready to share the experience and benefits of the country's best companies with the US and the rest of the world.

The author is an assistant researcher at the Institute of American Studies of China Institutes of Contemporary International Relations.

China & US Focus

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