Why China Investors Finally Believe Xi's Tech Crackdown Is Over

Beijing needs the private sector more than ever amid persistent issues like deflation

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BEIJING - Even before President Xi Jinping met leading Chinese entrepreneurs on Feb 17, investors began piling into technology shares, betting that a years-long crackdown on the private sector was at an end.

The Hang Seng Tech Index surged in the previous trading session to its highest since February 2022 after reports of the impending meeting.

The summit had all the trappings of a national turning point, with the state media promoting Mr Xi's discussion with the likes of Alibaba Group Holding founder Jack Ma, Huawei Technologies' Ren Zhengfei, Xiaomi chief Lei Jun and Meituan's Wang Xing.

The gathering is the most forceful sign yet that Beijing will support the private sector after a series of brutal regulatory moves dating back to 2020 that hammered profits, wiped out some businesses and drove entrepreneurs like Mr Ma out of public view.

WHAT WENT WRONG FOR CHINESE TECH FIRMS?

The sector boomed after Alibaba's initial public offering in 2014, when venture capitalists and investors began to see the riches to be made in the world's most populous country. Founders like Mr Ma and Mr Wang became billionaires and celebrities.

Their ostentatious wealth and freewheeling lifestyle displeased the country's leadership. In 2020, when Mr Ma took the stage at a Shanghai conference and let loose with a now-infamous tirade against the state financial sector and government watchdogs, it was too much for officials in Beijing.

Regulators stunned Wall Street by shutting down the initial public share offering of Alibaba affiliate Ant Group - the world's largest market debut at the time - before launching an assault on the rest of Mr Ma's empire.