U.S.-China trade talks “put Alibaba on the right side of all the issues on the table,” said Executive Vice Chairman Joseph Tsai on a fiscal Q4 earnings call Wednesday. Calling the trade war the big “elephant in the room,” Tsai spoke as if a comprehensive trade accord was already done. China’s “commitment to purchase more American products” means it will become a “net importing country,” reducing the U.S.-Chinese trade imbalance, he said. The Chinese e-commerce giant is "not concerned about slowing China exports affecting GDP growth because the Chinese economy is shifting from an export economy to a domestic consumption economy,” he said. "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population," said Tsai. "The middle class will double in the next 10 years, especially from the lesser-developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years." China in recent years also has made "significant improvements in reducing" intellectual-property theft, as it "moves closer to global norms in protecting and paying for foreign IP," he said. Any trade accord with the U.S. will help further that goal, he said. “The vexing issues in the trade negotiations will resolve themselves, as the Chinese economy is already evolving to close the gap between the interests of the United States and China.”
The European Commission decided “in principle” to launch an own-initiative (ex officio) anti-dumping and anti-subsidy investigation concerning imports of mobile telecom networks and essential elements such as radio access networks and mobile network cores from China, said Trade Commissioner Karel De Gucht Wednesday. The decision won’t be activated right now to “allow for negotiations towards an amicable solution with the Chinese authorities,” he said in a statement (http://bit.ly/100W67W). China exports telecom network equipment to the EU market valued at just over 1 billion euros ($1.29 billion) per year, the EC said. An ex officio trade defense action is one undertaken without an official complaint from the EU industry, the EC said. It offers a “shield” when the risk of retaliation against European companies asking for trade defense instruments is high, it said. The EC has been gathering evidence for over a year, said De Gucht spokesman John Clancy at a press briefing. If an investigation is ultimately begun, however, further evidence would have to be collected, he said. Asked about a timeline for activating the case, Clancy said, “The clock is ticking.” The EU has had an open-door policy with its Chinese partners for a year, and now hopes authorities will step forward and discuss this situation in a serious manner, he said. The EU wants “rapid engagement” from China, he said. Clancy declined to say what evidence the EC has so far.