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Exclusive Interview Aired Today on CNBC's "Squawk on the Street" at 9AM ET
WHEN: Today, Wednesday, June 21 at 9AM ET
WHERE: CNBC's "Squawk on the Street"
Following are excerpts from the unofficial transcript of a CNBC Exclusive interview with Alibaba Executive Chairman Jack Ma from Alibaba's Gateway '17 Event in Detroit, MI. The exclusive interview aired today on CNBC's "Squawk on the Street." Following are links to video of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000629460, http://video.cnbc.com/gallery/?video=3000629445, http://video.cnbc.com/gallery/?video=3000629469, http://video.cnbc.com/gallery/?video=3000629503 and http://video.cnbc.com/gallery/?video=3000629483.
All references must be sourced to CNBC.
JACK MA ON GLOBALIZATION AND INTERACTION WITH PRESIDENT TRUMP
JACK MA: My belief is that globalization is good. But it needs to be improved. Globalization should be inclusive to everybody. We should not, you know, throw out the baby, because the baby is crying too much. It's a good thing. But how can you improve it? Globalization only in the past 30 years. So what if we can improve next 30 years? I'm a believer, strong believer, that globalization can help create jobs, especially small businesses. Next 30 years, the technology is going to challenge a lot of job opportunities. So if we cannot help the local business going global, it's going to be a big problem. Today, I see so many small businesses. They're buying from this country, manufacturing there, design in the U.S.A., and sell to China. This is called global business.
DAVID FABER: Right. Supply chains are all over the place.
JACK MA: That's right.
DAVID FABER: There is absolutely. Globalization, many would argue, has been a benefit for the world economy, as you just said. However, you seem to be swimming against the current tide. I know you're talking about a replacement or a different organization than the World Trade Organization that you're sort of thinking about, that would empower small business. But when you have governments that are not embracing it the way they once did, isn't that a threat?
JACK MA: No. In the past 18 years, when I do internet in China, we got criticism every day. You know, something where you believe it, a lot of people criticize it. But if you really believe it, continue to do it, improve it. I've been doing like a crazy man. Last year, I fly in the air 870 hours. And this year, I will fly, maybe, over 1,000 hours in the air.
DAVID FABER: Why are you doing that? Why are you spending 1,000 hours in an airplane and visiting with world leaders? What's the point?
JACK MA: You have to push it. Convincing people globalization is good, convincing people free trade is good, convincing them that small business should be the driver of the globalization, the force. You cannot stop globalization. The world is getting so small, right? Internet, airplane tickets, and the people traveling around the world. How can you stop it?
DAVID FABER: You can't.
JACK MA: You cannot stop it. If you cannot stop it, improve it.
DAVID FABER: All right. So you go, and you talk to various world leaders, including the President of the United States earlier this year. Did he embrace what you're talking about? Because certainly, his platform has not been one that has necessarily embraced the ideas you're espousing.
JACK MA: I think he supported the small business and young people. And when I say, we are going to have a small business summit in the Midwest, in Detroit, he was so excited. He said, "Jack, this is a great idea. Please do it. And if there's anything I can help, let me know."
JACK MA ON JOBS AND CHINA DOMESTIC CONSUMPTION
JACK MA: We created more than 33 million jobs for China. And we believe that, even one online shop can create at least 1 million jobs.
DAVID FABER: It's an enormous number. It would be, obviously, a great benefit. But still, how would that work?
JACK MA: We already did a lot of things for Americans creating jobs in the past 18 years, when we do the B to B. Even in California, there are more than 20,000 small businesses using Alibaba platform to sell their products across the board, to buy products from outside, and assembling them and packaging them and sell them. Already create a lot of jobs. We proved the model. We proved this model in the other countries, too.
DAVID FABER: Apples grown in Washington State can end up in China.
JACK MA: Yeah, yeah, cherries. Yeah.
DAVID FABER: Or cherries. But it's got to be more than just apples and cherries, doesn't it?
JACK MA: June 18th, we had a small promotion. Within 15 minutes, or less than 15 minutes, we sold 2 million lipsticks. China's girl – women love this kind of stuff. So we think that this is the demand. By the way, I say, past 30 years, the domestic consumption of the United States drives the global economy and drives – supporting so many small businesses in America or China to sell things globally. Today, next 30 years, the domestic demanding power of China is going to drive millions and millions of small businesses globally.
DAVID FABER: And it has turned. But that economy that we've been waiting for is still in process. I mean, the Chinese economy is still an export-driven economy, not a consumption-driven economy, no?
JACK MA: China's changing. China is going to import $8 trillion in the next five years. China knows very well, China has to buy. Because as I said, 300 million middle class. They need high-quality products, high-quality services.
JACK MA ON ARTIFICIAL INTELLIGENCE, DATA AND JOBS
JACK MA: The first technology revolution caused World War I. The second technology revolution caused World War number-- war two. This is the third technology revolution. People are already unhappy. Because a lot of machine learning, artificial intelligence, killing a lot of jobs. So this is what I think. The way to figure out the job creation, one of the best ways, is to help small business to sell their local products across the board. And we have to prepare now. Because next 30 years, is going to be painful.
DAVID FABER: It's going to be painful.
JACK MA: Very painful.
DAVID FABER: Because of the changes that are going to take place.
JACK MA: Change of the technology, change of the –
DAVID FABER: You're going to have a lot of people with a lot of time on their hands, too –
JACK MA: Well, you know, the other thing people are—
DAVID FABER: How they might want to spend it on Alibaba watching movies and buying things. But –
JACK MA: Well, believe or not, I think next 30 years, people only work four hours a day and maybe four days a week. My grandfather worked 16 hours a day in the farmland to digging. He thinks he's very busy. We work eight hours, five days a week. We think we are very busy. By the next 30 years, people only work four hours. Normal people visit, like, 30 places. 30 years later, they will probably visit 300 places. So they will be a mobile population. So stop globalization. It is impossible. The only thing is that, how can we make the globalization more inclusive, the trade more inclusive, knowledge more inclusive? This is how we can deal with the instability of the world.
DAVID FABER: These are all very important issues. But a lot of them do come back to politics. They come back to governments and the willingness to invest and the willingness to make hard choices. I'm not seeing a lot of those hard choices being made right now in the world.
JACK MA: This is why I'm traveling, talking to all the government and state leaders and telling them, moving fast. If they do not move fast, there's going to be trouble. My belief is that you have to repair the roof while it is still sunshine.
DAVID FABER: Do you think the machines will win?
JACK MA: No. Humans will win.
DAVID FABER: They will?
JACK MA: Oh, yeah, absolutely. Machine is good for knowledge. But human being are good at the wisdom. So that is why I'm encouraging a lot of governments and talking to a lot of government officials. Pay special attention to the education system. If you want the machine is going to be smarter than human beings. This is for sure. Because the day where we design the machine, we know machine is powerful, stronger than us. When we designed the trains and buses, we know machines are going to run faster than us. When we have the computers, we have to know that machine is going to be smarter than us. But the human beings, they are not only smart. They have the wisdom.
DAVID FABER: And so artificial intelligence will never have wisdom?
JACK MA: No. Artificial intelligence is going to be very smart. So the smart – between smart and the wisdom, smart people know what you want. Wisdom people, wise people, know what they don't want.
DAVID FABER: I just continue to wonder what that world will look like over the next 30 years and whether we can survive –
JACK MA: It's going to be painful.
DAVID FABER: What's painful? What does that mean?
JACK MA: Well, you will see that some people, because the knowledge is not enough. The wisdom is not enough. So the new wave coming, the job is being taken away. Some people who catch up the wave will be rich, will be more successful. Some people will be more painful. The government, you know, the world is going to be data. The people will now have more data than the bosses.
DAVID FABER: You have a lot of data at Alibaba, don't you?
JACK MA: Yeah, we do.
DAVID FABER: And how are you focused on creating and obtaining more of it?
JACK MA: I think it's just the beginning of the data period. We think data is going to be so important to human life in the future. Compared to tomorrow, our data is nothing. Tomorrow, IOT, internet of things, everything connected. Everything will be—
DAVID FABER: Billions upon billions of devices connected.
JACK MA: We think that we are a big data company today. That was compared to yesterday. Compared to tomorrow, we are nothing.
DAVID FABER: Well, what will it let you do, having access to that data, as it accumulates more and more? What will it allow you to do?
JACK MA: Improve people's lives, improve the machines, to make sure the machine can do a better job to support human beings instead of machine do better job than human jobs. So I think that they – we don't know how data really can make money today. But we know we have to protect the security of the data, the privacy of the data. And when we know, one day, that data will empower the human being.
DAVID FABER: But you know a lot about your customers already, I would assume. I mean, they've spent a lot of time on the platform, what, 25 minutes a day, seven times a day. Many of them are younger. They're using their mobile devices. But that's just the tip of the iceberg.
JACK MA: Yeah, that's the beginning. Just today's data is like 100 years ago, people thinking about electricity is the lights, you know? But they never thought, 100 years later, we have a refrigerator and a washing machine. Everything is using electricity. So data. You know, we have to believe our kids will be much smarter than us using the data.
DAVID FABER: But you don't believe all that data, when used with artificial intelligence, will create wisdom. You don't.
JACK MA: No. No. No. Wisdom is from the heart. The machine intelligence is by the brain. Brain is about knowledge. You can always make a machine to learn the knowledge. But it is difficult for machines to have a human heart.
JACK MA ON ANBANG
JACK MA: Well, I think, as businesspeople, me, I do everything to make sure that my customers happy, employees happy, the society is good. It's healthy. Social responsibility is the key. Whatever we do, we try to make sure that the society is good. So I don't know what's going on with the others.
DAVID FABER: You don't.
JACK MA: I don't. But—
DAVID FABER: I mean, it's a small community of you giants in Chinese business. You don't know have any idea what happened to Chairman Wu?
JACK MA: I know these guys. I know Chairman Wu for years. But we do never talk about the what we think about. So sometimes, when I look at these businesspeople doing things, I say, "Wow. I'm not going to do anything like that."
DAVID FABER: And it doesn't concern you, when you see them without any idea of why they've been – disappeared?
JACK MA: I talked to some of them. Well, I talked to some of the people. I say, "Hey, guys. If I were you, I would focus on customers. I would focus on not making money. I would focus on making value." A lot of people so keen about making money. When they're keen about making money – so, I believe there are three things you should not touch: power, money, and the glory.
JACK MA ON FINTECH
JACK MA: Yeah, someday. It will be as known as Alibaba, probably be, I don't know, much more famous than Alibaba.
DAVID FABER: More famous? Why?
JACK MA: Yeah. Because I think the techfin that we are doing, we are enabling small businesses and young people to be able to reach financial support. The fintech is to empower the financial institute to be more powerful. Maybe they want to support their customers better. But we think that we should make the Ali into financing is something we want to do that how we can build up a system that can meet the needs of 21st century financial needs. And the second thing is how we can make financial really inclusive. So now, we are growing so fast in China. We are growing so fast in India, a lot of developing countries have been using that. Someday, there will be IPO. Not because we want to raise money, because we want let more people share and more people know about it, more people benefit.
DAVID FABER: That's what you said about Alibaba, too, when you took it public.
JACK MA: Well, yeah. So in today, China, we are making a lot of cities cashless society.
DAVID FABER: You believe China will be a cashless society?
JACK MA: Of course, yeah. We will keep on doing. Next five years, we already come to – in five years, we will make most of the cities cashless societies in China. Hangzhou, my city, is already cashless society, almost.
DAVID FABER: Although there's a lot of competition. I mean, WeChat, Tencent's WeChat Mobile is taking market share from Alipay, isn't it?
JACK MA: Well, when you do business, don't worry about competition. There's nowhere in this world there's no competition. You have to get used to it. So it's not about – this techfin is just the beginning.
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