China’s Xi Jinping speaks to entrepreneurs in a rare high-profile meeting

Chinese President Xi Jinping delivered a speech at a symposium with prominent entrepreneurs on Monday, according to state media Xinhua, 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 the private sector 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.

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.

Other entrepreneurs who attended the meeting included Ren Zhengfei, founder and chief executive officer of Huawei Technologies, and Lei Jun, founder and CEO of consumer electronics maker Xiaomi.

Beijing initiated a regulatory storm against the country’s large technology companies in late 2020 out of concerns that they were growing too large and powerful.

Ma’s return to the limelight could reinforce the expectation that Beijing is softening its approach on large tech companies, Maynard said.

Mainland China’s CSI 300 index was little changed following the news.

The Hang Seng tech index, which had jumped over 5% last Friday on the media reports of the meeting, declined 0.11% on Monday.