China Vice Premier Liu soothes tech firms, supports overseas listings

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SHANGHAI — Chinese Vice-Premier Liu He made soothing comments to tech executives on Tuesday, saying the government supported the development of the sector and public listings for technology companies in further signs a crackdown on the sector is easing.

Liu was speaking at a meeting convened by China’s top political consultative body, the Chinese People’s Political Consultative Conference (CPPCC).

Footage of the meeting broadcast by CCTV showed the founders of search engine giant Baidu Inc and mobile security software maker Qihoo 360 – Robin Li and Zhou Hongyi, respectively – in attendance, confirming a Reuters report.

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The unprecedented regulatory crackdown, which began in late 2020, has hit Chinese technology companies and roiled markets, shaving billions of dollars in market value off the firms.

Hong Kong and U.S.-listed shares of Chinese technology firms rose on Tuesday after news of the meeting emerged.

Liu said at the meeting China will look to “properly manage” the relationship between the government and market.

The country will support tech firms pursuing listings both at home and abroad and also look to support the healthy development of the platform economy, state broadcaster CCTV quoted him as saying.

The platform economy refers to digital platforms, including those used to conduct online commerce, a major driver of economic activity.

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Liu’s comments come as COVID-19 curbs and other steps to battle the pandemic have created havoc for businesses and supply chains across a range of sectors, adding to fears the world’s No.2 economy could shrink in the second quarter.

Beijing has set a growth target of 5.5% this year, which private economists have said will be difficult to reach without significant government support.

At Tuesday’s meeting, Liu also said China wanted the battle for “key core technologies” to be fought well, CCTV added.

The meeting was called to discuss how to promote the development of the digital economy and was attended by nearly 100 members, the broadcaster said.

Citi said in a research note that the meeting suggested another positive regulatory signal for the platform economy and “supportive attitude” for internet companies seeking listing in overseas markets.

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Baidu’s Li and Qihoo 360’s Zhou are members of the CPPCC, which brings prominent people in business, the arts and academia to discuss issues with the Chinese Communist Party.

Baidu and Qihoo 360 did not respond to requests for comment.

Beijing had sought to rein in a range of private industries as part of a push to clamp down on violations of anti-monopoly regulations and data privacy rules, among others, as well as bridge a widening wealth gap that threatened the legitimacy of Communist Party rule under a “common prosperity” drive.

But the restrictions on e-commerce, private education and the property sector exacted an economic toll and, since the beginning of the year, China has loosened some of the measures while wrestling with strict COVID lockdowns.

Liu has been at the forefront of efforts by the government to reassure the private sector.

Last month, China’s powerful Politburo, in a meeting chaired by Chinese President Xi Jinping, said it would step up policy support for the economy, including the platform economy. (Reporting by Binbin Huang and Brenda Goh; Additional reporting by Yingzhi Yang, Josh Ye, Julie Zhu, Sophie Yu, and Eduardo Baptista; Editing by Edwina Gibbs, Frank Jack Daniel and Himani Sarkar)