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China Vice Premier Liu eases tech firms and supports overseas listings

China Vice Premier Liu eases tech firms and supports overseas listings

May 19, 2022: -On Tuesday, Chinese Vice-Premier Liu He made soothing comments to tech executives, saying that the government supported the sector’s development and public listings for technology companies in further signs a crackdown on the industry is easing.

Liu was 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 shows that the founders of search engine giant Baidu and mobile security software maker Qihoo 360, Robin Li, and Zhou Hongyi are in attendance, confirming a Reuters report.

The unprecedented regulatory crackdown, which started in 2020, has reached Chinese technology companies and roiled markets, which shaves billions of dollars in market value off the firms.

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

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

The country will support tech firms pursuing listings both at home and abroad and 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 massive driver of economic activity.

As Covid-19 curbs and other steps to battle the pandemic, Liu’s comments have created havoc for businesses and supply chains across various sectors, adding to fears that 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 challenging to reach without significant government support.

At Tuesday’s meeting, Liu said China wanted the battle for “key core technologies” to fight well, CCTV further said.

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

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

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.

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