(May 12): China’s top political advisory body plans to host a forum next week with some of the country’s biggest private sector companies, including Baidu Inc, an event that will be scrutinized by investors wondering whether Beijing will reverse its crackdown on the tech industry.
The Chinese People’s Political Consultative Conference (CPPCC) aims to host the symposium next week with attendees including officials from government agencies such as the China Cyberspace Administration and business executives, including the founder of Baidu, Robin Li, said people familiar with the matter. Vice Premier Liu He, President Xi Jinping’s top economic aide, may also be present, the people said, asking not to be identified discussing a private matter.
As the conference focuses on the broader theme of developing China’s digital economy, investors will likely be watching for signs of whether Beijing intends to end its year-long crackdown on the tech sector. Xi’s administration is appealing to industry – the biggest engine of growth in the past decade – to revitalize an economy struggling with continued urban lockdowns, supply chain bottlenecks and heavy consumption. evaporation.
Shares of sector heavyweights Baidu, Tencent Holdings Ltd and Alibaba Group Holding Ltd pared their earlier losses on Thursday (May 12) morning in Hong Kong.
Sentiment towards the industry has shifted hugely in recent weeks, with businesses from Tencent to Jack Ma’s Alibaba surging on April 29 after China’s top leaders issued a sweeping series of pledges to boost economic stimulus. Later that day, the South China Morning Post and the the wall street journal reported that the government was holding a symposium – originally scheduled for earlier this month – to signal a slowdown in the frenetic pace of Beijing’s campaign. This rally proved to be short-lived in part due to a lack of concrete action to support a sector that has lost more than US$1 trillion (about RM4.39 trillion) in value. On Wednesday, tech companies led a rally in the Chinese stock market.
In April, the CPPCC convened a videoconference meeting with companies from Hangzhou, the eastern Chinese city at the heart of the country’s private sector expansion, including Hangzhou surveillance camera maker Hikvision Digital Technology. Co. This was part of a series of preparations for a national conference. scheduled for May, the agency’s official journal said at the time.
It’s unclear whether next week’s forum will trigger policy changes or easing, the people said. The timing could also change, given the difficulty of organizing a major conference as cities from Beijing to Shanghai grapple with shifting Covid-19 lockdowns. Delegates will attend virtually as well as in person, depending on role and location. Baidu representatives did not respond to requests for comment, while calls to the CPPCC press office were not returned.
The CPPCC, whose more than 2,000 members include the country’s most prominent politicians and entrepreneurs, such as Li, exists primarily to debate, advise and support policies and legislation, or as a sounding board for the country’s leaders. Its members meet at least once a year and systematically echo the country’s top priorities, from population growth in 2021 to systemic financial risks in 2018.
Beijing has now made stability its top priority in a year plagued by global geopolitical and economic uncertainty – especially as its top officials prepare to make a key leadership transition towards the end of 2023. China already promised in March to ease its regulatory onslaught as part of efforts to stabilize struggling financial markets and stimulate the economy.
It has fueled expectations that the crackdown – which began with the dramatic reversal of Ant Group Co’s record-breaking initial public offering before snowballing into an assault on every corner of China’s technosphere – will follow. its course, or at least passes at a more sustainable pace.
That would be good news after a turbulent 2021, when Beijing limited underage gaming time, banned profits across swathes of the online education sector, forced companies from Alibaba and Meituan to Didi Global Inc. to change basic business practices and otherwise determine the future of a once freewheeling industry in disarray.
But investors remain cautious as they weigh a mix of developments, including a restart of game approvals and a campaign to rein in the little-understood algorithms internet companies use to deliver content and collect data. The Hang Seng Tech index is up 37% this year from a mid-March low before returning most of those gains in recent weeks.