ALIBABA IS no ordinary company. Founded in 1999 by a former English teacher in the Chinese city of Hangzhou, it has grown into the e-commerce leader of the People’s Republic, with revenue rivaling those of its U.S. counterpart eBay. Small wonder SoftBank of Japan and Yahoo of the United States took huge stakes in the firm. Now Alibaba proposes to open itself to all investors, large and small, by offering shares on the U.S. market, an initial public offering that could turn into the largest in history.

This has been playing as a good-news story, and, in many respects, it is. We can admire the entrepreneurial spirit that propelled Alibaba’s founder, Jack Ma , to fame and fortune. Alibaba’s growth reflects the increasing prosperity of the Chinese consumer. Its IPO is a potential opportunity for ordinary Americans to profit from the promised shift of China’s emphasis on exports to demand-driven growth. The more enmeshed China and its companies become in global free-market capitalism, the more they may absorb its norms.

Or so one hopes. As we said, Alibaba is no ordinary company. For all Mr. Ma’s personal pluck, his company’s success is due in no small measure to actions of China’s Communist authorities — actions that make it impossible for competitors such as Facebook, YouTube and Twitter to operate freely and that, at times, mandate unfriendly regulatory treatment of U.S. firms.

Alibaba’s future depends on continued warm relations with a state that, as the company’s U.S. securities registration form candidly notes, controls Alibaba’s Internet access and “continues to play a significant role in regulating industry development by imposing industrial policies . . . exercises significant control over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.”

To stay on the right side of that state, Alibaba cooperates with Internet censorship that would be unthinkable in the West, for the very good reason that it’s incompatible with basic human freedom. Again, Alibaba’s securities registration form: “We may be subject to liability for content on our websites and mobile interfaces that is alleged to be socially destabilizing . . . or otherwise unlawful.” Alibaba is required by Chinese law to watch out for “socially destabilizing” or “superstitious” content — the latter being code for pro-Falun Gong material. And yet, given the censors’ whims, “It may be difficult to determine the type of content that may result in liability to us.”

For would-be U.S. investors, then, what sort of market “play” is Alibaba’s IPO? A bet on the Chinese consumer’s prosperity? Or a bet on the Chinese government's plan to keep consumers materially satisfied but politically contained? It’s a bit of both, we’d say; like the U.S.-China relationship more generally, it poses a conflict between Americans’ democratic values and their economic ambitions. Caveat emptor.

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