China's Ascendancy

"Open sesame!" - Alibaba and the Forty Thieves

Today marked an historic occasion as Alibaba's stock was listed on the New York stock exchange.  It marked the largest IPO ever raising the company more than $21 billion and valuing it at more than $220 billion.  The shares opened up more than 40% making Ma, the founder, China's wealthiest man.  Talk about "Open Sesame"!  To think that he started the company in 1999 in his house while teaching English as a school teacher makes the story even more remarkable and even more like the original story (he was a poor woodcutter who found an entrance to a secret cave where thieves hid their loot; the words Open Sesame unlocked the cave entrance and access to a fortune).

What also interests me is that this Chinese company not only eclipsed the likes of Facebook and Amazon but it shows China;s ascendancy into a technology superpower that more than rivals the United States.  Furthermore it shows just how important a large population and rapidly expanding middle class can be to local companies.  The company boasts more than 220 million active buyers using its platform and it now has plans to expand its services and platform throughout the rest of the world.

He will now use American money to expand internationally taking on Amazon, EBay, Google and others while these companies face massive government intervention in their efforts to expand throughout China.  So the protectionism that China has for its companies has worked in that they are now becoming global players but at what point in the future will the walls blocking free entrance to China be removed so that there can be a level playing?

With the Chinese flag flying in front of the NYSE today it appears that greed trumps everything but to me it also shows that business and economic freedom can supersede political squabbling.  It is now time for the Chinese to allow foreign businesses to operate freely throughout China but in order to achieve this we have to turn to the politicians to hash out an agreement.  While this will take time and will come with a large amount of baggage and distrust, until things can be ironed out I will continue to marvel at the greed that is American investment banking but hopefully Alibaba can use the magic words to open the gates to free competition.