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Alibaba Clash Spotlights China Political Risk for Business

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How serious are Alibaba Group Holding Ltd.’s problems with the Chinese government going to get?

In an unusually public dispute this week, Alibaba and a Chinese regulatory agency clashed over business practices and ethics. The State Administration for Industry and Commerce accused Alibaba of failing to crack down on shady merchants, bribery and fake goods, charges the company has rebutted. Co-founder Joe Tsai even opened an earnings call Thursday with a full-on barrage at the regulator, saying he was “deeply troubled” by its actions.