“It will be very hard for China to achieve economic growth of 8% in 2009,” said Premier Wen Jiabao in Davos, Switzerland. Due to the global recession, China’s GDP grew by 9.0% in 2008, with the last quarter’s growth rate dropping to 6.8%, the lowest rate in past 7 years. After the global recession hit China, thousands of plants shut down, and most of the workers lost their jobs and had no choice but to return home. According to the data from the central government, by the end of 2008, 20 million migrant workers had lost their jobs. More job losses are expected in 2009, because more companies will enter difficult times due to the worsening global economic environment.

In the past, many factories and exporters rely on Alibaba to find their potential buyers, and Alibaba is proud to have this article ‘The Day when Alibaba does not exist in China’, reflecting how much the exporters rely on Alibaba in their trading businesses. However, it is worth to take a look in today China economy and ask, ‘the Day of Alibaba when the exporters one after another is shutting down’.

All these while, Alibaba has positioned itself as ‘unique positioning of B2B’ where they claimed themselves as the first and only ‘Made in China’ company that excel in B2B era, and has a great vision to help millions of China SME/SMI to go global. Indeed, Alibaba really has helped many of the China companies to transform the ‘Made in China’ goods to oversea market, and creating millions of potential global opportunities. However, when come to global recession or rather the great depression situation, will Alibaba’s magic still working? Thousands of its customers have claimed for shutdown due to ‘overstocked’ and ‘overproduced’ but can’t find the new marketplace to sell their products to. It will be worth while for the senior exec of Alibaba to take a look back, where personally I don’t see any additional value that this company can bring to China SME/SMI.

The market need a new business model for B2B, same goes to B2C or C2C. If we deep dive into the root of this economic recession, it is not easy to find that major of China’s products are shipped to United States, and thanks to the big brother who have always enjoying high GDP growth and spending behavior like they hate their money so much and can’t wait to throw it away in exchange of some fake identity, high ‘brand’, not necessary products. They are fortunate to have a mastermind guru name Steven Covey who teach them to grade ‘effective time management’ but forget to teach them ‘effective money management’; and to rank their spending as ‘urgent and important’, ‘urgent but not important’, ‘not-urgent but important’ and ‘not urgent and not important’, and obviously all their spending to boost GDP all these while are majority falled under ‘urgent and important’ to those Chinese Exporters. And obviously too, when these American start to realise their ‘urgent and important’ spending generator can no longer crunching out new credit line from their credit card, they start to move the spending in this category into ‘non-important and non-urgent’ and start to squeeze their pocket. They have then upgrade their ‘urgent and important’ spending to limit to ‘spending to find new job’, ‘spending to survive’, and of-course, ‘spending for Beer’.

Anyway, back to China here, once the American start to tide up their belt and pocket, they are stuck. No one else (or rather countries) like Amercian who can absorb almost everything China produce. Even Dubai, Middle East, Europe or Ausie are now badly damage by Amercian’s financial crisis and start to downgrade their spending pattern.

So what’s next? When 90% of China SME/SMI start to suffer from this spending depression, the China GDP will fall, and most of the exporters will face greatest joy in their live, to spend hard with their existing credit line they enjoy, and prepare to go bankrupt in next 3 – 6 months. 50% of the SME/SMI that growth up during great economy boom in Year 1999 to date and solely rely on exporting their products to oversea will sieze to be another new chapter for China Great Business History book. What will be the future of Alibaba when this happen, where its majority income are from SME/SMI? It will depend on the 40 robbers to decide. :)