BEIJING, CHINA – FEBRUARY 5: Chinese President Xi Jinping attends a meeting with Pakistani President Asif Ali Zardari (not pictured) at the Great Hall of the People on February 5, 2025 in Beijing, China.
Wu Hao | Getty Images News | Getty Images
Chinese President Xi Jinping delivered a speech at a closed-door symposium with prominent entrepreneurs on Monday, according to state media, signaling support for the private sector at a time when the country’s economy has been facing several headwinds.
Xi’s presence at the symposium sends a “very clear signal of top-level support” to entrepreneurs, Peiqian Liu, Asia economist at Fidelity International told CNBC, “this will likely reignite the animal spirit and optimism about renewed growth momentum in China.”
“It could potentially be even more powerful than fiscal stimulus, should policymakers show more decisive support towards the development of tech sector in China,” Liu added.
Beijing has sought to shore up its economy dragged down by lackluster domestic consumption, a prolonged real estate slump and external headwinds such as tariffs on its exports.
The meeting could mark “a symbolic turning point for Chinese tech sector after years of heightened scrutiny,” said Lynn Song, chief economist at LNG, emphasizing the timing of this meeting underscored Beijing’s urgency to cheer up the private sector amid economic malaise and external tariff risks.
It could mean that “the regulatory overhang that we have had for the past two years or so is at an end,” said Andy Maynard, managing director and head of equities at China Renaissance.
Separately, state media CGTN reported that Chinese lawmakers were “deliberating a draft of the country’s first basic law focused on private sector growth.”
“The law will be of great significance for further optimizing the development environment for the private sector and driving high-quality growth,” according to the report.
It stressed that the private sector contributed for more than 60% of China’s GDP, 48.6% of foreign trade, 56.5% of fixed-asset investment, 59.6% of tax revenue and more than 80% of urban employment.
“The fast-growing sector has played a significant role in promoting technological innovations and stabilizing economic growth,” the report said.
Alibaba’s founder Jack Ma was among the entrepreneurs present at the meeting, according to a video clip released by Chinese state media.
The outspoken businessman has mostly stayed out of the public eye since Chinese authorities scuttled a blockbuster initial public offering of Alibaba Group affiliate Ant Group in November 2020, after his public criticism of the country’s regulatory system enraged Beijing.
Ma’s return to the limelight could reinforce the expectation that Beijing is softening its approach on large tech companies, Maynard said.
Other entrepreneurs who attended the meeting included Ren Zhengfei, founder and chief executive officer of Huawei Technologies, Lei Jun, founder and CEO of consumer electronics maker Xiaomi Corp, Wang Xing, founder of food delivery giant Meituan, along with heads of automaker BYD and battery maker Contemporary Amperex Technology Co.
“You can never underestimate the power of such a meeting” in simply restoring the confidence of Chinese entrepreneurs, who had been treading cautiously to not “step on the wrong foot or head down a path that may be something that [Beijing] doesn’t like,” said Sam Radwan, founder of consultancy firm Enhance International.
Beijing kicked off a regulatory storm against the country’s large technology companies in late 2020 over concerns that they were growing too large and powerful.
While the symposium may not signify “a 180-degree turn” in China’s control over the direction of its economic policy, it does reflect Beijing’s recognition of the significant role that China’s private sector can play in supporting growth and boosting technological capabilities amid tightening restrictions by Western nations, Alfredo Montufar-Helu, head of China Center at think tank The Conference Board, told CNBC.
Mainland China’s CSI 300 index was little changed following the news.
The Hang Seng tech index, which had jumped over 5% Friday on media reports of the meeting, widened losses to drop over 2% following the meeting.
Chinese startup DeepSeek’s release of a cutting-edge AI model has helped drive a rally in the country’s stock market in the past month, prompting calls for an upward rerating of equities. The low-profile founder of DeepSeek, Liang Wenfeng, was previously reported to have been invited to the meeting.