Number 10 announced the appointment today, ahead of a four-day state visit by China's President Xi Jingping.
Commenting on the appointment today, a Downing Street spokeswoman said: "This is about appointing someone who has real business experience and understanding of the Chinese market."
Ma is reportedly the wealthiest man in mainland China, with an estimated net worth of $22.5bn. Alibaba initiated trading on the New York Stock Exchange in September 2014 with the biggest IPO in US history, raising $21.8bn.
The BAG meets four times a year to discuss major economic issues. Following the General Election, Cameron appointed a new slate of 19 City leaders to the group, including more than a dozen chief executives of UK blue chips.
The chief executives of BP, Legal & General, EasyJet, Land Securities, the London Stock Exchange Group, Persimmon, Asda, ARM, Severn Trent and Rolls Royce are all members the group, as are the chairs of Universal UK, EY, Lloyd’s of London and Santander.