Alibaba Says China Exports May Rise in Fourth Quarter (Update2)

Bloomberg

3 August 2009

China's exports may rise in the fourth quarter, snapping a losing streak that began in November last year, said Alibaba.com Ltd. Chief Executive Officer David Wei.

The operator of China's biggest trading Web site, which helps Chinese businesses find overseas buyers, has seen a "noticeable" recovery in orders, especially from North America, Wei said at a press briefing today in Shanghai. Fourth-quarter exports will either be unchanged or increase "by single digits" from a year earlier, he said.

China's overseas shipments fell 21.4 percent in June from a year earlier as the global recession cut demand for the shoes, toys and electronics of the world's second-biggest exporter. The government's 4 trillion yuan ($585 billion) stimulus package helped revive economic growth to 7.9 percent in the second quarter from 6.1 percent in the first.

North America accounts for about 19 percent of Alibaba.com's overseas users, with almost all of those in the U.S., Wei said today. About 11 percent of users outside of China are in India, 8 percent to 9 percent in the U.K. and about 5.5 percent in Japan, he said.

"We probably have more confidence than even President Obama has for a recovery in the U.S.," Wei said. Alibaba's statistics for overseas orders are usually reflected in trade data from China's customs bureau three to six months later, he said.

'Economic Winter'
Alibaba knew in the second quarter of last year that China's trade figures for the fourth quarter of 2008 would be "ugly," Wei said today. Jack Ma, Alibaba's chairman, sent a memo to the company's employees warning of an "economic winter" in July of last year. "

Increasing orders for Chinese exports and Alibaba's earnings aren't "necessarily" linked, Wei said. Alibaba, scheduled to release second-quarter earnings on August 13, generates revenue from subscription fees paid by companies that use its Web site to find buyers for their products.

Wei was in Shanghai today to sign agreements with China Construction Bank Corp. on collaborating to provide loans to small and medium-sized businesses in the city that use Alibaba's online services.

Alibaba, working with China Construction Bank, Industrial&Commercial Bank of China Ltd., Bank of China Ltd. and five other domestic lenders, aims to provide 6 billion yuan of loans to businesses across China this year.