China’s top economic official gave an unusual public show of support for digital platform companies Tuesday, suggesting Beijing may be ready to let up on a year-long clampdown on technology giants as it battles a slowing economy.
Chinese Vice-Premier Liu He made soothing comments to technology executives, saying the government supported the development of the sector and public listings for technology companies in further signs a crackdown on the sector is easing.
Liu spoke at a meeting convened by China’s top political consultative body, the Chinese People’s Political Consultative Conference (CPPCC), Reuters reported . The crackdown, which begun in late 2020, has roiled markets and shaved billions of dollars in market value off China’s technology companies.
Footage of the meeting broadcast by CCTV showed Chinese tech founder Baidu Inc’s /zigman2/quotes/209050136/composite BIDU +1.86% Robin Li and Qihoo 360’s founder Zhou Hongyi in attendance. Liu’s remarks reported by state media were short on detail but signal further easing of the regulatory risk for China’s technology behemoths including Ten Cent Holdings /zigman2/quotes/204605823/delayed HK:700 +0.52% , as investors await clues on whether a rout in their shares is near an end. The Hang Seng Tech Index rallied as much as 6% Tuesday on optimism the meeting would affirm Beijing’s intention to dial back some of its restrictions. U.S.-listed shares of Chinese technology companies rose also after news of the meeting emerged at which Liu said China will look to “properly manage” the relationship between the government and market.
It will support tech firms pursuing listings both at home and abroad and also look to support the healthy development of the platform economy, including those used to conduct online commerce, state broadcaster CCTV quoted him as saying.
Liu also said China wanted the battle for “key core technologies” to be fought well, CCTV added.
The meeting was called to discuss how to promote the development of the digital economy and was attended by nearly 100 members, the broadcaster said.
Li and Zhou are members of the CPPCC, which brings prominent people in business, the arts and academia to discuss issues with the Chinese Communist Party.
Beijing had sought to rein in a range of private industries as part of a push to clamp down on violations of anti-monopoly regulations and data privacy rules, among others, as well as bridge a widening wealth gap that threatened the legitimacy of Communist Party rule under a “common prosperity” drive.
But the restrictions on e-commerce, private education and the property sector exacted an economic toll and, since the beginning of the year, China has loosened some of the measures while wrestling with strict COVID-19 lockdowns.
Liu has been at the forefront of efforts by the government to reassure the private sector.
Last month, China’s powerful Politburo, in a meeting chaired by Chinese President Xi Jinping, also said it will step up policy support for the world’s second-largest economy, including the platform economy.
Beijing has set an economic growth target of 5.5% this year, which private economists have said will be difficult to reach without significant government support, as COVID-19 lockdowns and other heavy curbs to battle the pandemic create havoc for businesses and supply chains.