Why Jack Ma isn’t worried about China’s slowing economy

China’s economy is slowing. That much, everybody knows. But how bearish (or bullish) you feel about that probably depends on your perspective. And Jack Ma? It should come as no surprise to anyone that he’s bullish.

At a recent interview at Stanford University with Yahoo co-founder Jerry Yang, Ma explained his personal take on China’s economic situation right now. What follows is a transcript of his remarks compiled and slightly edited by Tech in Asia.

First, I think people in the States and the West worry about China. I think it’s a good thing, because every time the West worries about China, China goes up, and when people in the West think ‘Wow, China has a good future, then China [goes down]. The West has been suspicious of China’s growth for the past 30 years; it’s fine, it takes time for both sides to understand each other.

But China kept on growing at 10, 11, 12 percent for so many years; I don’t think it can last long. It’s impossible. It’s like a human body: when you are [already] 1.8 meters tall you cannot keep growing at that pace all the time. You have to grow in your quality – the brain – not the body size.

And especially today…first, I think it’s impossible to keep 10-15 percent growth. Second, is that China needed to be slowed down, and has to learn to be slowed down. When you see the water, when you see the air, when you see all the resources we use? It’s impossible and it’s ridiculous. We don’t want China to be making a lot of money and then spend it on medicine, spend the money in the hospital [because people are so unhealthy from pollution]. This cannot work.

Jack Ma in a previous appearance at Stanford.

On the other side, people like me…China is slowing down to 7 percent? Good! But the thing is, even at 7 percent, we are still the fastest-growing economy in the world [Ed note: This is not actually true]. 7 percent of the total GDP: think about it, guys, this is lots of money. We should use the money in a better way. We need quality, not quantity. 30 years ago we needed a lot of quantity, but now it’s quality.

I think in the West there’s an expectation that China should have quality: China should control the air, the pollution, and this and that. When we really start to do it, people start to worry. Which is fine.

The other thing is that I think China’s economy is not that bad. […] There are three things called the three mache [carriages] of the Chinese economy: investment in infrastructure, exporting, and domestic consumption. These are the three things that China’s always proud of; these are the three things that make China’s economy grow.

But the investment in infrastructure? Slowing down. And exporting? Slowing down. These are the two things that government is very good at, they love to do [them]. But there is one thing they [cannot do well] which is consumption, because consumption is not done by government, it’s done by entrepreneurship and a market economy.