Alibaba Is a Window Into China’s Two-Speed Economy
Like the Chinese economy itself, Alibaba isn’t firing on all cylinders
Photographer: Qilai Shen/Bloomberg
No other company embodies the promises and perils of China’s current growth model quite like Alibaba Group Holding Ltd. The technology giant’s most recent quarterly earnings are a textbook illustration of the contradictions of Beijing’s two-speed economy — both strong and shaky at the same time.
First the good news: Revenue at its flagship cloud division grew at a better-than-expected 34% compared to the year before. The unit’s contribution to total sales was only 16% in the three months to September, but the proportion has been steadily expanding all year. Home of the popular Qwen AI model, downloaded more than 10 million times since its relaunch last week, brisk growth in this business is a sign that Alibaba’s data-center bet may be starting to pay off.