Alibaba Group Holding Ltd (BABA) Market Woes a clear Indication of an Ailing Chinese Economy

Alibaba Group Holding Ltd (NYSE:BABA) downward trend continues to persist seen by the stock sinking even further in week opening session after the Taiwanese government ordered the giant online company to pull out of the country in six months’ time. Alibaba has been on the downward trend in the recent past in line with the Chinese slowing retail market; sentiments that investment banker and economist Robert Blohm echoed during an interview with Fox Business.

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Alibaba Group Holding Ltd (NYSE:BABA) stock has been under immense pressure after holding one of the largest IPO in history that saw the stock to soaring to highs of $120 a share. However, sentiments seems to be changing for the company as the Chinese economy continues to slow so has the online sensation seen its prospects in the retail space start to dwindle.

Blohm reiterates that Alibaba Group Holding Ltd (NYSE:BABA)’s deceleration in the market mostly has to do with power struggles between the company and the government, which is trying to acquire control of the online sensation.

“The issues about Alibaba Group Holding Ltd (NYSE:BABA), number one Jack Ma, if he looms largely into the communist party you know what they will do to him? They will shoot him down, there is no competition he can’t have the power,” said Mr. Blohm

Coal usage in China is down for the first time in 13 years having dropped by 3% another indication that the economy is struggling making the retail markets also feel some form of pressure. Accusations leveled by the Chinese government that Alibaba Group Holding Ltd (NYSE:BABA) was dealing in counterfeit products have only gone to harm the company’s prospects and sentiments.

The government of China is also being accused of not doing enough to rejuvenate the slowing economy in the wake of the government raising taxes to suppress foreign investments. The move only goes to put more pressure on the ailing economy especially the retail side of the business where Alibaba Group Holding Ltd (NYSE:BABA) is a key player.

“They want less intrusive foreign investment; they want foreign investment they can control. [..] They want Chinese growth by Chinese less growth by foreigners,” said Mr. Blohm.

It is highly unlikely that the Chinese economy will grow by the proposed 8% according to Blohm as a majority of Asia economies continue to struggle. The economist also refuted suggestions that by 2049 China will have surpassed the U.S as the world largest economy.

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