China: Xi Jinping meets IT bosses, share prices of those not present plummet
China's leadership has been cracking down on the powerful IT sector for years. A meeting in Beijing indicates a shift — but not for everyone.
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China's head of state Xi Jinping met with the heads of the Middle Kingdom's major tech companies on Monday, signaling that his regime's crackdown on the industry could be coming to an end. The presence of disgraced Alibaba founder Jack Ma was particularly noticeable, while the absence of the heads of Baidu, JD.com and ByteDance put the shares of some companies under heavy pressure, as reported by the Financial Times. The search engine group Baidu in particular suffered massive losses, with its shares falling by seven percent on Monday. Overall, the meeting could indicate that the People's Republic wants to support the IT sector in the face of threats from the USA.
The end of the crackdown?
In addition to Jack Ma, the meeting was also attended by the founder of the electric car company BYD, as well as the heads of Huawei, the battery company CATL, Tencent and the head of the AI start-up DeepSeek, according to consistent media reports. DeepSeek in particular was recently responsible for a veritable rally on Hong Kong's stock exchange, adds the Financial Times. An index of the 30 largest tech companies whose shares are traded there has gained 24 percent in value since the beginning of the year. The meeting now signals that the Chinese leadership wants to support the industry again, unlike a few years ago, the security of the bosses in China is back, the newspaper quotes an expert as saying.
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Around 2020, Beijing began to take action against the large IT companies whose influence had become too great for the regime with fines, regulations, newly established regulatory institutions and more drastic steps. This was triggered by a speech by Jack Ma in which he criticized the regulatory authorities for their “old way of thinking”. A crackdown ensued, in the course of which the industry lost trillions in market capitalization and the bosses had to fear for their personal safety. Ma himself had disappeared from the public eye, was no longer active on social media, and had partially relinquished control of his company empire.
It initially remained unclear what Xi Jinping said to the company bosses. In the past, he has used such meetings to announce relief for the private sector, for example. The reception in the Great Hall of the People was also attended by high-ranking Communist Party cadres such as Premier Li Qiang and Wang Huning, who is also a member of the Party's inner leadership circle. The People's Republic is threatened by further trade disputes with the USA, which could do business even more difficult for companies. The world's second-largest economy is also suffering from weak consumer spending, which is being driven by a severe real estate crisis.
(mho)
