---
title: "Jack Ma Assesses China's 2017 Economic Situation at Zhejiang Entrepreneurs Convention: The Next 3-5 Years Will Be More Difficult Than Imagined"
description: "On January 25, 2017, Jack Ma delivered a keynote speech at the annual meeting of the Zhejiang General Chamber of Commerce, sharing his views on the global and Chinese economy. He predicted that the economic situation in the next three to five years would be more difficult than imagined, emphasized the importance of transformation and upgrading, and called on Zhejiang entrepreneurs to adhere to four principles: idealism, optimism, learning, and self-respect."
author: "New Distribution"
publisher: "New Distribution"
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published: "2017-02-07"
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# Jack Ma Assesses China's 2017 Economic Situation at Zhejiang Entrepreneurs Convention: The Next 3-5 Years Will Be More Difficult Than Imagined

> On January 25, 2017, Jack Ma delivered a keynote speech at the annual meeting of the Zhejiang General Chamber of Commerce, sharing his views on the global and Chinese economy. He predicted that the economic situation in the next three to five years would be more difficult than imagined, emphasized the importance of transformation and upgrading, and called on Zhejiang entrepreneurs to adhere to four principles: idealism, optimism, learning, and self-respect.

**Click to read the original text for details**
Introduction: On January 25, 2017, Jack Ma delivered the final speech of the Year of the Monkey at the annual work meeting of the Zhejiang General Chamber of Commerce, with a wealth of information.
**Main Points:**
  * Past globalization was decided by a few countries and large enterprises; future globalization, empowered by technology, will be driven by small and medium-sized enterprises and innovative companies worldwide.
  * Trump is very smart, and the next six months after taking office are extremely critical.
  * Within three to five years, I am not optimistic, and I believe the economic situation will be more difficult than everyone imagines.
  * Zhejiang entrepreneurs should adhere to "Four Persistences": idealism, optimism, learning, and self-respect, self-esteem, and self-improvement.
  * I proposed five new things; some disagree, but it doesn't matter. I believe in them and will turn them into reality.
  * For a person to succeed, EQ, IQ, and LQ are all indispensable.
**The following is the full text of the speech:**
Today, I would like to share with you my recent experiences, views, and thoughts, and discuss them with you. In the future, we can make the annual economic situation sharing session more colorful, not just me as the president giving a monologue. As the president of the Zhejiang General Chamber of Commerce, I am truly honored and humbled. I feel I am not particularly good at this job. Over the past year, I have devoted myself to thinking, hoping to travel more, because due to my work, I have more opportunities to meet people from the economic, political, artistic, and scientific circles around the world.
**1. Trump is very smart, and the next six months after taking office are extremely critical**
First, let me report on my recent meeting with US President Trump. During the meeting, I also took the opportunity to promote our Zhejiang General Chamber of Commerce. Views on Trump's election vary; today, it is not only a global focus but also a huge controversy in the United States.
**I think we should not underestimate Trump. His election as US President was not an accident; I believe it was inevitable.** Given the current world situation and the US economic situation, such a president has emerged. We should trust the American people in such a large country, believe that they elected this president, and give Trump some time; there will be changes. Our exchange was very good; we discussed Sino-US relations and corporate development. After all, we are both businessmen, so we talked business. In short, we discussed many views on economic issues, Sino-US trade, and how to develop the economy.
I am generally optimistic about Sino-US trade relations, but there will definitely be contradictions. In the future, there may be trade conflicts between China and the US. If not handled properly, they could lead to a relatively large trade war. However, if a trade conflict occurs, it is bad for both sides, bad for China, bad for the US, and bad for the global economy.
But I want to tell you, Trump is relatively open and listened to some of my views and opinions. I think the world has expectations for Trump. His speaking style and way of doing things are just different from the politicians we imagined. He sees many problems in the US today, but he hopes to solve them in a different way. Moreover, he is a businessman with strong execution and result orientation. It's just that his approach is different from what we have seen from presidents of other countries.
Trump's taking office will definitely bring huge changes to the US and to the world's political and economic landscape. But whether these changes are good or bad is too early to say. I believe Trump is very smart; he is a very smart person. Some things he could say before becoming president, just like I said it was easy before becoming the president of the Zhejiang General Chamber of Commerce, but after taking the job, I realized it was not easy. Everyone has a learning process.
**2. This was the most exciting and proudest Davos for me; China participated in the world**
I attended the Davos meeting some time ago. It was the most exciting and proudest Davos meeting for me in over a decade. I have been attending Davos headquarters meetings for over ten years. At that time, almost no important figures attended, but this time I saw the chairman's entire speech, his commitment to the world, his promises to China, and his views on world trade. During those days, almost everyone was talking about China and discussing the chairman's speech.
Some say this year's Davos became China's Davos. I think it is more appropriate to say it was China's participation in Davos; China is participating in the world, and China should not and is not ready to say that it will become the world's leader today. Of course, I am a global board member of Davos. At the board meeting, the entire discussion also revolved around China. **The US said globalization is not working and free trade is not working, but China instead proposed its commitment to the world.**
**A friend of mine, also a Davos board member, sat next to Biden and said that the US seemed to hand over the world's leadership and global business leadership to the Chinese, transferring this power to the Chinese.** Everyone agreed, and Biden also agreed with this view.
**3. Transformation and upgrading must slow down**
In addition, how do we view China's economy today? **I have said many times about China's economy: within three to five years, I am not optimistic, and I believe the economic situation will be more difficult than everyone imagines.** **This is normal; thirty years of rapid development cannot continue.** I once gave an example: a person's height growth, before the age of twenty, may continue to grow, with an annual increase of 8% or 9%. But after twenty, it is impossible to grow more than ten centimeters a year. What grows is the head and quality, not quantity. At this time, China's economic growth rate has appropriately slowed to around 7%, but in my view, it is still too fast. With such a large volume, a 4% or 5% growth is quite impressive. So maintaining quality growth is a sign of a healthy Chinese economy. Don't think that 6% is a slowdown. Today, no country in the world, as the second-largest economy, can maintain growth above 6%. I think it is quite remarkable.
**China has undergone earth-shaking changes. Our industries must undergo transformation and upgrading. We must upgrade our manufacturing.** This morning I mentioned that people keep saying China's manufacturing is very strong. Actually, objectively speaking, it is still far behind. In the past twenty-plus days, I went to Switzerland, Japan, and Germany. Look at the exquisite manufacturing level of Swiss watches and the manufacturing level of Mercedes-Benz in Germany.
In Switzerland, I visited an airline's business jet interior decoration, including wood panels and wiring. I was stunned. I originally thought an airplane was just that, but seeing the exquisite materials and the polishing craftsmanship on site, I was amazed. The craftsmanship of Swiss watches, including Japanese manufacturing, the so-called spirit of craftsmanship, is very important to love and dedication. If you truly improve manufacturing, your quantity must decline. **Low-end manufacturing wins by quantity; high-end manufacturing definitely does not win by quantity but by quality.**
If we do not upgrade our industries, on one hand we hope China's economy improves and our environment improves, but on the other hand we are unwilling to pay the price. Transformation and upgrading require a price, like pulling a tooth: it hurts, there is bleeding, you need to take leave, and pay medical expenses. If you are unwilling to pay these costs and still talk about transformation and upgrading, it is definitely empty talk.
Now our country must transform and upgrade. Transformation and upgrading is like turning a corner; the speed must be slow. I personally think transformation and upgrading must slow down.
**4. The economy should be operated, not just attract investment; anti-corruption has created a good business environment**
Our current anti-corruption campaign is painful in the short term. In the past two or three decades of rapid development, China's economy was basically promoted at the level of county party secretaries, district party secretaries, and municipal party secretaries. **But now, in many places, due to the extensive economic development of the past thirty years, after anti-corruption, the government-driven economy has slowed down. In the short term, it is painful, but in the long term, it has established a good business environment for all Zhejiang entrepreneurs and all Chinese enterprises.** In fact, we particularly hate bribery, relying on relationships, and various forms of money, which cause social injustice. I believe the price paid today will give us the opportunity to build up the country's economy in ten years.
I have traveled to many countries, heard many things, and met many people. I increasingly feel that China is very fortunate to have launched a strong anti-corruption campaign at this time. Many countries are actually quite scary. When we sell goods on Taobao to other countries, out of a hundred phones, only eighty-seven arrive; thirteen are taken by customs. It is very scary. The corruption along the way—I won't mention the names of these countries, but they are quite big names, yet the corruption is more severe than imagined. The corruption in these countries will definitely bring huge losses to their long-term economies.
**5. When big storms arise, the captain's composure is extremely critical**
The economy may not improve within three to five years. Let me tell you a piece of bad news: the world economy and China's economy are not good. The good news is that everyone is the same; no one is good. The US is not good, Europe is not good, and China is not good. At this time, the most important thing is entrepreneurial spirit. **I personally think that when the economic situation is bad, it is the key moment to consider excellent entrepreneurial spirit.** Whether a general is good is not determined by whether he charges into battle, but by how he retreats. An excellent general, when losing a battle, knows how to return step by step and go with the flow. When everyone is charging forward, you cannot see a good general. **To assess whether someone is a good entrepreneur, look at how you lay out your plans, allocate resources, build your organization, and establish your structure when the economy is bad.** We need to make plans for three to five years. Don't have a fluke mentality, thinking that doing this will improve. You need to have plans for three to five years. Now, looking ahead, the probability of a good economic situation in the next three to five years is very small, and the probability of a bad economic situation is very high. Calm down and seriously make strategic plans for three to five years. I think only then will there be opportunities.
For our company, like Alibaba today, we have laid out long-term plans for many years, which is why we have today's overall economic strength. We announced our quarterly results yesterday, with growth of 54%. With such a large volume and 54% growth, we are still very worried about the future and must maintain a high level of vigilance. Please remember: when big storms are about to come, the captain's composure is extremely critical.
I always remember this story: three people were going out together, three monks. The storm was very strong; a storm was about to come. One person had a very good umbrella, one had a very good raincoat, and the other had nothing. After going out for half a day, the three returned. The one with the umbrella broke his leg, the one with the raincoat also broke his leg, and the one without rain gear came back clean.
What was the reason? The decision-making methods of the three: the one with the umbrella said, "I have better conditions, I'm not afraid," and in the strong wind and waves, he was immediately injured. The one with the raincoat thought he could also manage. The one without an umbrella or raincoat was very careful to avoid the storm, waiting for it to pass before setting out, which was still in time.
**6. For Zhejiang entrepreneurs to become global enterprises, they must first ask themselves three questions**
When the economy is good, there are bad enterprises; when the economy is bad, there are good enterprises. In fact, for all of us here, no matter how big the enterprise, including me, the economic situation really has little to do with you. Then you might say, if it has little to do with the economic situation, why do you run around everywhere? Because I hold the position of president of the Zhejiang General Chamber of Commerce and chairman of the China Entrepreneur Club, I have to run around to see the overall world situation and share my views with you.
**In the future world, due to the internet, all enterprises are connected more and more closely. Everything that happens, you know immediately.** In the past, you could do business in things others didn't know about because information was not smooth, and you could make a price difference. Today, you have no chance to make a price difference. Today, you need to do things that others cannot do or cannot do well. Regardless of the economic situation, **when doing business, always ask yourself three questions: What do you have? What do you want? What do you give up?** Each of us should ask these questions every year. When you are in pain, ask these three questions; when you are happy, ask these three questions.
What do you have? I ask myself this question, and I have nothing. I didn't do well in college entrance exams, and after graduating, I earned only a little over a hundred yuan a month. Figure out what you want, and finally figure out what you give up. When in pain, you also need to think clearly about what you have, what you want, and what you give up. In fact, after thinking these through, the economic situation has nothing to do with you. What you need to do is not compete with others for a little gain. Face is not important; happiness, health, friends, and friendship are more important.
**7. The "Four Persistences" for Zhejiang entrepreneurs: idealism, optimism, learning, and self-respect, self-esteem, and self-improvement**
**First, adhere to idealism.** Always remember that we have come this far because of ideals. Today, we should not give up idealism because we have money and things.
**Second, adhere to optimism.** I am an optimist. I don't believe a pessimist can run a good enterprise. Whether you like it or not, in ten years, there will be more successful entrepreneurs than today, and a large number of enterprises will be born in ten years.
The changes in the next thirty years will far exceed everyone's imagination. I proposed five new things; some disagree, but it doesn't matter. I believe in them and will turn them into reality: new retail, new manufacturing, new finance, new technology, and new energy. These five new things are only a small part of future changes.
The next thirty years of this century are thirty years of technology application. Everyone here must pay full attention; this is not an exaggeration.
In the next thirty years, please remember: manufacturing will change, the retail industry will change, and the financial industry will change.
Alibaba, like everyone else, is such a company. Although we are at the forefront, being at the forefront does not mean you are the leader. Yahoo was once at the forefront, and it disappeared.
Electricity was not first invented in the US but in Europe. The US fully utilized electricity. Cars were not invented in the US, but the US fully utilized cars, turning the country into a nation on wheels, and then seized the energy revolution. In the next thirty years, big data, cloud computing, artificial intelligence, new manufacturing, and new retail are not exclusive to high-tech companies. They belong to whether you are willing to accept these things, embrace them, let your young people do them, and learn.
When I first started learning, I believed in the saying, "Use people without doubt; doubt people without using." About seven or eight years ago, I changed it to "Use people with doubt; use people you doubt." Only by using people with doubt and using people you doubt can you innovate, and have the breadth of mind and courage.
The chairman said at Davos: This is the best of times, and it is the worst of times.
In fact, China's manufacturing is not bad. You know we have Hupan University. When these students come to register and talk about manufacturing, I am extremely excited. This is the future manufacturing we hope to see. Guo Guangchang and Shen Guojun are judges and principals. I believe that after listening, everyone feels that China still has such good manufacturing. We just need to give them some time. That is to say, their today is Tencent fifteen years ago, Facebook fifteen years ago, and Alibaba fifteen years ago.
**Third, we must adhere to learning.** If we don't directly know what is happening in the world, what is happening next door, and what competitors are doing, I think we cannot move toward the future.
**Fourth, we must adhere to self-respect, self-esteem, and self-improvement.** The world has undergone great changes. China has entered a commercial society, but many of our thoughts are still agricultural thoughts. We always feel that the merchant group is not good. I hope that as businessmen, we should have self-respect. Only when we value ourselves, respect ourselves, make ourselves strong, start paying taxes, start creating employment, and participate in social responsibility, will we be strong.
**8. For a person to succeed, EQ, IQ, and LQ are all indispensable**
For a person to succeed, they need EQ, IQ, and LQ (Love Quotient). If you want to succeed, you must have strong EQ. People with good EQ are more likely to succeed because more people support you. But to remain undefeated, you must have IQ.
Our current second-generation young people have high IQ but poor EQ. Have you noticed? Our children, after being sent to Peking University, Tsinghua, Harvard, or Wharton and coming back, have very good knowledge structures, but their EQ seems a bit lacking. They either offend this person or that person. EQ is honed through experience; EQ is developed through play. Today, I see many young Zhejiang entrepreneurs. If your children are very young, spend some time letting them play. Children who play will have EQ. Under strong pressure, those who have been suppressed will have good EQ. People with high EQ are willing to help you, but people with high IQ are less likely to fail.
My own IQ is not high; I am very self-aware of this. My EQ is average, but a bit better than ordinary people because I have suffered a lot and maintained optimism, which makes me always see others in a good light.
**My IQ is not high, but I invite people with very high IQ to Alibaba. I don't understand finance, so I invite the best financial people. I don't understand technology, so I invite the best technical people. I use my EQ to unite everyone, form a team, make everyone happy, and establish a good system.**
So to succeed, you need EQ; to remain undefeated, you need IQ; but to be respected, you must have LQ, the Quotient of Love. Many of our enterprises are very large, but no one respects them because their minds are full of money. I think money is important, but it only proves that you are a smart person who can make money. So LQ is particularly important. What is LQ? It is responsibility, doing things that seem unrelated to you. I believe that everyone here will feel proud of most decisions. When you make the biggest decisions that have nothing to do with your business, these decisions will make you proud for a lifetime. It doesn't matter if others respect you; what matters is that you know it yourself.
-END-


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