From an editorial Thursday in the Chicago Tribune:
The hottest company in the business world is a Chinese firm with an Arabic name going public on a U.S. stock market.
Oh, and one of the biggest beneficiaries of this development is the American economy.
How can that be?
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Alibaba is one of the most successful companies to emerge from China’s three decades of rapid economic growth. It is often referred to as “the Amazon.com of China,” but that description fails to do Alibaba justice.
Unlike Amazon, Alibaba doesn’t stockpile the goods it sells in giant warehouses bustling with shipping clerks. Instead, it connects buyers with sellers. It’s essentially an exchange. Its Web platforms enable shoppers to buy goods directly from businesses large and small. Its technology works especially well with smartphones.
On Friday, the company was expected to raise $25 billion in an initial public offering of its stock, valuing the company at nearly $200 billion.
This latest proof that China can innovate should come as a relief to Americans – some of whom are reflexively inclined to view any Chinese success as a threat to the U.S. True, China is a growing economic and military rival. But the world’s two largest economies are intertwined. America will do better if China does well too.
How direct is the impact of China’s success on the U.S.? Thanks to a smart investment move years ago, Yahoo, based in Sunnyvale, Calif., owns 22.4 percent of Alibaba. Now, this Chinese IPO stands to shower a U.S. company that has had its share of struggles over the past decade with a windfall.
Yahoo, in turn, can use the fresh capital to pursue its own surge of innovation.
Sounds to us like a win all around.