China pledges support to tech companies after market rout

China’s top economy official met with dozens of business leaders and industry experts on Tuesday and pledged “support” for tech companies amid a deepening economic slump.

Liu He, Vice Premier and President Xi Jinping’s closest economic adviser, said China “must support the platform economy and uphold the healthy development of the private sector.”

He added that according to state media, China should “better balance the relationship between the government and the market and support digital companies to be listed on domestic and overseas stock exchanges.”

Video footage from state broadcaster CCTV showed Baidu founder Robin Li and Qihoo 360 founder Zhou Hongyi at the meeting.

Markets closely followed news of the meeting held by China’s top political advisory body in hopes it could signal an end to Beijing’s regulatory crackdown on internet companies.

But in remarks aired by state broadcaster Tuesday night, Liu made similar pledges made two months agowhen he first intervened to urge a speedy conclusion to China’s tech crackdown and promised to boost the ailing economy.

Shares in Chinese companies rallied, with Alibaba and Pinduoduo closing more than 6 percent higher in New York.

Little public progress has been made towards resolving the issue since Liu’s remarks in March Investigation of National Security in the ride-hailing giants Didi Chuxing or the restructuring of Jack Ma’s fintech company Ant Group.

Didi’s apps have been removed from online stores for almost 11 months. The company will hold a vote on its delisting from the New York Stock Exchange next week, a move it said was necessary to complete the government investigation during that time The Hong Kong IPO has been put on hold.

The Chinese People’s Political Consultative Conference routinely holds meetings with leaders from the private sector, religious and academic fields who are on the ceremonial body. Tuesday’s meeting focused on China’s digital economy, a nod to the tech sector.

Amid the economic downturn caused by Xi’s zero-Covid policy and regulatory tightening, China’s state media and political leaders have made pledges to support the economy to boost market confidence.

“It is not correct to say that the crackdown will ‘end’, how can it end?” said an investment manager at a leading Chinese tech company, adding that Liu’s comments only served to stabilize market expectations.

Larry Hu, Macquarie’s chief China economist, said that “the meeting itself as a gesture is more important to boost investor and corporate confidence.”

Wang Yang, a member of the Politburo Standing Committee, said at the conference that the tech sector should study Xi’s words on the digital economy and balance the need for “development and security.”

Additional reporting by Jennifer Creery in Hong Kong

China pledges support to tech companies after market rout Source link China pledges support to tech companies after market rout

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