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Alibaba Group Holding Ltd (BABA)’s Ma in Belgium Amid Protectionist Policies

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Alibaba Group Holding Ltd founder Jack Ma is scheduled to hold talks with the King of Belgium on Monday. The meeting is the third such since last June when King Philippe toured China on a state visit. The two also met on the sidelines of the World Economic Summit held in Davos, Switzerland early this year.

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Analysts expect Ma to announce plans to establish a Belgian office of the Chinese eCommerce giant. Ma had promised King Philippe last year that he will open a local Alibaba Group Holding Ltd subsidiary. The move is aimed at making online payments easier to Chinese tourists in Belgium.

The decision highlights the degree of market confidence that Chinese investors have of the 500 million-strong European Union population. The EU boasts membership drawn from 28 countries.

However, some businessmen in China are still wary of the EU market due to the risk of terrorism. Other factors keeping them away include economic stagnation, the rising wave of immigrants and increased activity by politicians who want their countries to exit the EU. The investors have also complained that while some members have welcomed Chinese investment, others still enforce protectionist measures against them.

Alibaba CEO, Jack Ma is a Testimony of China’s Market Reforms

Ma’s strategy of expanding his company to the EU comes at an interesting time. A few days ago, the European Parliament voted by a landslide to declare China as a non-free market economy. This is a fascinating fact when you consider that Ma himself is a former English teacher who founded Alibaba, a multi-billion dollar business. This makes him a classical example of ordinary Chinese business people who prospered when China introduced radical market reforms.

Due to these reforms, both EU businesses and consumers have benefited from low-priced but high-quality Chinese products. This means Chinese products have improved the quality of life of ordinary EU citizens. European businesses have also benefited in terms of improved competitiveness.

For example, Chinese steel exports in the EU have helped local automakers cut their production costs in the aftermath of the financial crisis. Moreover, most of these automakers also find a ready market for their trucks or cars in China.

Such benefits aside, EU politicians and certain member states have opted to overlook this nice aspect of Chinese exports to the EU. The main fear is that this could lead to their citizens losing jobs. Lobbyists are also having a field day reminding politicians of those fears in Brussels.

American Companies Face Protectionist Hurdes in the EU

It is ironical that instead of asking their own local companies to boost their own competitiveness, EU politicians have resorted to blaming Chinese exports for the local economic slowdown. This position by the EU lawmakers is also to blame for the increasing lawsuits being filed against American companies operating there. The American firms, including Alphabet Inc.’s Google are being investigated by the EU Competition Commission over what it terms as abuse of monopoly, among other charges.

It is also remarkable that Brussels, which hosts the EU headquarters, was recently hit by terrorist attacks. Such attacks tend to ruin investor confidence in the local economy. This means Ma, who just wants to take advantage of the business opportunities there, will be shocked to encounter protectionist hurdles.

Ma’s visit to Belgium is likely to be followed keenly by local Chinese investors. This is because his opinions about the country will help them decide whether it is worth investing in or doing business in the EU.

For Brussels, a positive reaction to Ma’s visit will market it as the gateway to the EU market. This means it should do away with protectionist measures and opt for more trade and investment. With all its numerous challenges, the EU should welcome Alibaba Group Holding Ltd for its own benefit.

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