Sept 23 (Reuters) – Is it a) funny, b) disturbing, or c)
irrelevant that Alibaba went public at a sky-high
valuation just at the point at which the red-hot economy which
spawned it seems content to settle into a creaky middle age?
Few of the investors throwing money at Alibaba hand over
fist last week seemed to notice, but China really is now
presenting a new version of itself to the world. Rather than
riding to the rescue when growth slows, as recent industrial
production data, the worst since 2008, shows it most clearly is
doing, China now is taking a more cautious, passive stance.
“China will not make major policy adjustments due to a
change in any one economic indicator,” Finance Minister Lou
Jiwei said on Sunday, adding that the country can’t rely on
government spending to speed infrastructure investment.
However you cut it, this raises questions for investors in
Alibaba, a Chinese e-commerce company which executed the biggest
ever initial public offering totaling $25 billion and saw its
shares surge 38 percent in their first day of trading.
Those who do back the Alibaba online marketplace will
doubtless make an argument along the lines that it isn’t
happening (China’s still booming! Well, comparatively.) and it
doesn’t matter that it is (Alibaba can grow independent of
China!), but of course financial markets aren’t simply about
truth; they also involve the valuation of uncertainty.