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Alibaba’s Joe Tsai: A lot of people are trying to stop China from upgrading its tech, including Senator Mark Warner

“I still don’t understand it.”

Sen. Mark Warner, D-Va., thinks that Chinese internet giants are too cozy with the country’s Communist government. Alibaba co-founder and Executive Vice Chairman Joe Tsai thinks Sen. Warner is trying to hold China back.

“Well, I’m sure in a lot of American companies there are Republicans,” Tsai said Wednesday at Recode’s annual Code Conference when asked about Warner’s comments. “The Communist party, per say, seems like a dirty word here. But, in China that’s the form of government.”

Tsai suggested that Warner’s criticism may be less about Chinese tech companies’ relationship with the government and more about outsiders concerned that China, which has historically been known for producing cheap exports, may finally be graduating to higher-quality products.

Instead of simply producing Apple’s iPhones on the cheap while Apple reaps all the profits, China needs to invent the high-quality goods it’s manufacturing, Tsai said.

“We need to upgrade our technology, we need to upgrade our manufacturing sector,” Tsai continued. “There’s nothing wrong with a country wanting to upgrade its own manufacturing center, go higher tech, be more innovative. But then from the Chinese perspective, we are seeing that there are a lot of people in America that want to stop China from doing that. ... Senator Warner is in that camp. They want to hold China back. I still don’t understand it.”

Tsai, who runs M&A for Alibaba, says that Alibaba has not tried to do a big acquisition deal in the U.S., but is definitely looking to create strategic partnerships. Specifically, Tsai wants to encourage American companies to tap into the Chinese market, where there are hundreds of millions of internet consumers as potential customers.

“We’re trying to partner with entrepreneurs here and invest in minority equity stakes here,” Tsai said of the U.S. “We are looking for people who want our help in expanding their markets into China.”

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