- Chinese leader Xi Jinping met with the country’s top tech leaders, signaling support for the private sector.
- China has cracked down on Big Tech in recent years as it prioritized national security over private sector profit-making priorities.
- Chinese tech shares rallied after Xi acknowledged the importance and contributions of the private sector.
Chinese leader Xi Jinping has signaled that he’s ready for business again in a high-profile meeting featuring the country’s top tech bosses.
On Monday, Xi presided over a meeting with China’s private sector leaders — including a beaming Jack Ma clad in a black Mao suit.
At the meeting, Xi urged the executives to “show their talent” and messaged support for private businesses. His audience included gaming giant Tencent CEO Pony Ma, electric vehicle maker BYD CEO Wang Chuanfu, and Huawei CEO Ren Zhengfei.
“It is necessary to resolutely remove all kinds of obstacles to the equal use of production factors and fair participation in market competition,” Xi said, according to Xinhua state news agency.
Beijing should “continue to promote the fair opening of the competitive field of infrastructure to all kinds of business entities, and continue to make great efforts to solve the problem of difficult and expensive financing for private enterprises,” Xi told the business leaders.
On Tuesday, Chinese tech shares rallied on the positive signal that Beijing recognizes the importance of the private sector’s contribution to its challenged economy.
Xi’s encouraging stance toward the private sector on Monday is a stark contrast to Beijing’s scrutiny of the broader private sector over the last few years. The government has cracked down on private companies across various sectors, including those in online gaming and tutoring.
Hong Kong’s Hang Seng Tech Index closed 2.5% higher near a three-year high on Tuesday, bringing gains this year to 26%. The broader Hang Seng Index closed 1.6% higher.
To be sure, Chinese tech shares have already been posting strong gains in the last few weeks following the meteoric rise of startup DeepSeek’s latest flagship AI model.
“For the past few years, the Chinese authorities had prioritized national security over private sector profit-making priorities,” Tai Wei Lim, a professor of business at Japan’s Soka University, told Business Insider.
Meanwhile, e-commerce giant Alibaba closed 3.2% higher in Hong Kong on Jack Ma’s seeming return to favor.
In late 2020, he angered Beijing with public criticism of China’s financial regulators. An outspoken and high-profile Alibaba cofounder, he largely disappeared from public view after Beijing cracked down on his tech empire. It also cost Ant Group, which he founded, its initial public offering.
Jack Ma’s appearance at Xi’s meeting with business is particularly striking because it signals that “tech leaders seeking profit-making commercial research and products are welcomed” once again, said Lim, who specializes in the political economy of East Asia.
Xi’s appearance ‘is all-important’
Xi’s personal endorsement of China’s tech titans on Monday further boosts sentiment amid intensifying geopolitical rivalry and a trade war with the US in President Donald Trump’s second term.
Against this backdrop, the rise of DeepSeek — which triggered an AI-related sell-off on Wall Street last month — highlights the importance of the private sector in China’s economic ecosystem, Gary Ng, a senior economist at Natixis, told BI.
DeepSeek’s stunning breakthrough is a trigger showing “China cannot compete with the US without equal treatment and regulatory flexibility given to private firms,” Ng said.
Despite Xi’s personal stamp of approval, analysts say Beijing still needs to do more to support a broad economic recovery.
“The move can boost investors’ sentiment as more capital bet on the growth in China’s AI ability, but the impact on economic growth will depend on whether there is a real policy change,” said Ng, referring to a friendly regulatory environment that provides a level playing field for all companies.
But Xi’s personal appearance with private sector business leaders is a big deal on its own and a sign of state support in China’s high-context political culture, said Lim.
“Given Xi is the most powerful leader since Mao and he is the designated ‘Core Leader,’ his personal appearance at the meeting with the tech business leaders — China’s version of the ‘tech bros’ —is all-important,” said Lim.
