Jack Ma: China Still Growing Like 'No Other Economy'

In a new interview with the South China Morning Post, Alibaba Group Holding Ltd BABA founder and chairman Jack Ma discussed the health of the Chinese economy and what’s behind its slowing growth. After decades of impressive numbers, China’s GDP growth dropped to 6.9 percent in 2015, its lowest level in 25 years.

Fears of a Chinese economic downturn drove equity markets lower around the world in the opening weeks of 2016.

According to Ma, the slowdown is simply part of China’s growing pains and should be kept in proper perspective.

“There is no reason to expect an economy of such size to maintain such a [high] growth rate indefinitely, nor is it good for China to continue to grow at such speed,” Ma explained.

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He went on to compare China’s economy to a massive ocean liner changing course.

“We have to choose either to not slow down and overturn the ship, or slowing a bit to make the turn.”

He added that it would actually be more troubling if China’s growth continued in the double-digits.

“The economy is growing at 7 percent—some say the actual rate could be just 5 percent,” Ma added.” But even at that rate, there is no other economy of such size growing at this speed in today’s world.”

Ma continued by saying that employment is the critical metric for China looking forward, and as long as the labor market remains stable, “the economy will be fine.”

So far this year, the iShares FTSE/Xinhua China 25 Index (ETF) FXI is down 2.1 percent.

Disclosure: the author is long BABA.