(FORTUNE Magazine) – If you listen to Jack Ma, China's hyperbolic honcho of the Internet (and it's difficult not to), you would think that eBay CEO Meg Whitman is shacked up in Shanghai, struggling to salvage her business. Whitman "is spending much of the summer in China ... an admission of defeat," Ma recently told tech magazine Red Herring. In August, boasting to local press that he wanted to give Whitman "a nice welcome gift," he crowed about a $1.7 billion deal that has Yahoo buying 40% of his company, Alibaba.com, and Ma taking charge of Yahoo's Chinese operations. No question eBay is feeling major heat, since Alibaba's Taobao auction site claims more active users than eBay has. (eBay has been cutting prices in China; Taobao is free.) But while Ma insists that his American rival is acting desperate, Whitman's camp begs to differ. She spent 2½ weeks in Shanghai, Beijing, and Hong Kong in June, and then returned to the region for ten days in late July. That's four weeks in which, according to eBay spokesman Henry Gomez, she worked on projects to be announced later this year. And where is Whitman now? As far away from China--and Jack Ma--as she can be: camping in the western U.S. with her husband, Griff, and their friends. Armed only with a satellite phone, she couldn't be reached. But Gomez volunteered his take on the raging rivalry: "Jack Ma's strategy is to drive his competitors crazy. Now he's likely to drive Yahoo crazy as well." -- Patricia Sellers