China just completed its second private sector symposium, after the first one was held in 2018. It confirmed the importance of the tech sector and signaled a potential end to the multi-year crackdown.
The second private sector symposium was held on February 17 and attended by Chinese President Xi Jinping alongside tech leaders like Alibaba founder Jack Ma, Tecent’s Pony Ma and DeepSeek’s Liang Wenfeng.
In a state media report, Xi was quoted as saying that it is now «the right time for the majority of private business and entrepreneurs to show their talent», adding that there was an opportunity for them to create wealth.
Tightening Cycle is Over
According to a Morgan Stanley report by China chief economist Robin Xing, Beijing was entering a new regulatory tightening cycle in 2021 to balance growth versus sustainability, equality and security but is now «waving goodbye to the regulatory tightening cycle».
«Fast forward to now, we think Beijing is repositioning the private sector as a pillar of national competitiveness amid economic and geopolitical headwinds,» the report said, adding that the bank expects measured policy support and a more predictable regulatory environment in the next two to three years.
«While there had been hints that regulatory tightening would conclude soon, we think the return of a high-profile business leader marks the first definitive sign that regulatory reset has concluded.»
Sector Outperformance to Continue
In an investment note, UBS Global Wealth Management echoed the sentiments about the end of the crackdown, saying that it potentially removes «one of the longest-lasting overhangs on the [tech] sector’s performance».
«After a rally of over 25 percent from its January lows, we think President Xi's support for innovation industries, ongoing macro policy support, operating performance, and other fundamental improvements will be crucial drivers of the China tech sector’s outperformance of against the broader market from here,» the Swiss bank said.
