February 2, 2023

China may be getting ready to wind down its crackdown on big tech

2 min read

New Delhi
CNN Business

Shares of Chinese tech companies The signal from Beijing on Friday added that it could throw. Troubled industry A lifeline and renewed commitment to reduce the impact of Cove 19 on the economy.

Hong Kong’s Hang Seng Index rose 4%, while the Shanghai Composite rose 2.4%, after Chinese state media reported that the country’s top leaders had vowed to boost growth.

He also promised to “promote healthy growth” of the Internet economy and to introduce “specific measures” to support the sector, the Communist Party’s Politburo said on Friday. According to the news agency.

Follows the covenant a Extensive crackdown Some of the country’s largest private companies began in 2020 when the government put a brake on the Ant Group’s plan to go public at the last minute.

Analysts took Friday’s statement as a signal that the government could withdraw its dramatic regulatory offensive, which has been condemned. Industries ranging from tech and finance to gaming, entertainment and private education.

In short, today’s Politburo meeting aims to reassure the market that the regulation campaign, which began in late 2020, is over, analysts at Macquarie Capital said on Friday.

Tech stocks in Asia rose sharply, with the Hang Seng Tech Index rising 10% in Hong Kong. Alibaba

More than 15%, while Tencent

Increased by more than 11%.

The meeting of the Communist Party took place at a time when there are strict restrictions on Kuwait in China. Beaten up Its stock market and currency, and investors are increasingly frustrated about the effects of the lockdown on the world’s second-largest economy.

China’s leadership is clearly concerned about the slowdown. This is at least the second time this week that he has promised to fix the economy.

In a meeting on Tuesday, President Xi Jinping said the country would begin a development. Infrastructure costs Turmoil to boost domestic demand and boost growth.

Although markets were buoyant on Friday, analysts want to see. Develop specific policies.

“The economy is in crisis, the second quarter GDP growth is likely to be negative year on year,” said Xiwei Zhang, president and chief economist at Pinpoint Asset Management. A significant change in policy is needed.

“We will be reviewing the steps taken by the government in the next few weeks and will update our outlook accordingly,” he added.

Many investment banks have lowered their forecasts for Chinese growth over the past month. And the International Monetary Fund (IMF) said last week, citing the risks of Beijing’s tough zero-sum policy, that it expects growth of 4.4 percent this year, lower than the previous forecast of 4.8 percent. That’s well below China’s official forecast of 5.5 percent.

– Laura Hee in Hong Kong and the Beijing Bureau contributed to this report.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *