Alibaba performance hints at China's economic recovery, but Trump remains the wildcard

It’s not often that the world looks to one company as a proxy for an entire economy, and the world’s second-largest economy at that. But this is exactly what has happened with second-quarter results with e-commerce phenom Alibaba Group Holding Ltd (HKG:9988). With revenue growth back to levels last seen before the global lockdown, analysts are wondering whether this revival of fortunes mirrors a wider recovery in activity in China. Sales were up by 34% in the three months ended June 30, which is Alibaba’s best performance since the final three months of last year, where top-line growth was 38%. The underlying drag on sentiment is, however, the current trade impasse between Washington and Beijing and, specifically, President Donald Trump’s threatened clampdown on China’s leading tech companies. “We face uncertainties from not only the global pandemic but also increasing tensions between US and China,” chief executive Daniel Zhang is quoted as telling analysts on a call earlier. “We are assessing the situation and any potential impact carefully and thoroughly, and will take necessary actions to comply with any new regulations.”