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Chinese President Xi Jinping Signals Shift in Policy to Boost Tech and AI Growth
Xi Jinping signaled a shift in China’s approach to private tech firms, urging fair access and reduced financing hurdles. His remarks boosted confidence in Chinese tech stocks, with Alibaba jumping 3.2%. Analysts say China’s AI ambitions hinge on concrete policy changes rather than symbolic gestures.
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Xi Jinping Signals Policy Shift to Boost Tech and AI
Chinese President Xi Jinping took a bold step on Monday, hosting a high-profile meeting with some of the country’s most influential business leaders, including Alibaba co-founder Jack Ma, Tencent CEO Pony Ma, BYD CEO Wang Chuanfu, and Huawei CEO Ren Zhengfei. In a departure from years of regulatory crackdowns, Xi’s message to the private sector was clear: China needs its tech titans to thrive if it hopes to compete on the global stage.
“It is necessary to resolutely remove all kinds of obstacles to the equal use of production factors and fair participation in market competition,”
Xi stated, according to state news agency Xinhua. He emphasized Beijing’s commitment to promoting “fair access to infrastructure” and making
“great efforts to solve the problem of difficult and expensive financing for private enterprises.”
These comments signal a shift from Beijing’s previous prioritization of national security over economic growth, which had led to sweeping restrictions on private firms in key sectors such as online gaming, e-commerce, and private education.
Market Reacts: A Surge in Confidence for Chinese Tech Stocks
Xi’s words had an immediate effect on the stock market. The Hang Seng Tech Index surged 2.5% on Tuesday, reaching its highest level in nearly three years. The broader Hang Seng Index also climbed 1.6%, with investors interpreting the meeting as a strong signal that Beijing is ready to re-embrace private sector growth. Notably, Alibaba’s stock jumped 3.2% as investors speculated on Jack Ma’s possible resurgence in China’s business landscape after years of government scrutiny.
The latest stock results for Alibaba Group Holding Limited (BABA).
“For the past few years, the Chinese authorities had prioritized national security over private sector profit-making priorities,”
said Tai Wei Lim, a professor of business at Japan’s Soka University. Lim noted that Ma’s presence at the meeting was particularly significant, as it suggested that “tech leaders seeking profit-making commercial research and products are welcomed once again.” This is a dramatic shift from 2020 when Ma publicly criticized China’s financial regulators, a move that led to the cancellation of Ant Group’s highly anticipated IPO and his subsequent retreat from public life.
Source: AP
DeepSeek’s AI Breakthrough and the Global AI Arms Race
The timing of Xi’s public endorsement of private tech leaders is crucial, coming just as China’s AI ambitions are gaining momentum. DeepSeek, a Chinese AI startup, recently stunned the market with its flagship AI model, which demonstrated capabilities rivaling OpenAI’s leading models. This development sparked an AI-related sell-off in Silicon Valley and heightened competition between Chinese and U.S. tech firms.
“China cannot compete with the U.S. without equal treatment and regulatory flexibility given to private firms,”
said Gary Ng, a senior economist at Natixis. His statement underscores the growing consensus that China’s private sector is essential for sustaining long-term economic growth and keeping pace with the rapid advancements of AI giants like OpenAI, Google, and xAI.
DeepSeek’s success has only added urgency to the conversation about China’s AI policies. Despite the enthusiasm surrounding Xi’s meeting, analysts warn that symbolic gestures alone will not be enough.
“The move can boost investors' sentiment as more capital bets on the growth in China’s AI ability, but the impact on economic growth will depend on whether there is a real policy change,” Ng cautioned.
The private sector will be looking for tangible reforms, such as reduced regulatory burdens and greater access to government backed funding, to confirm that Xi’s promises translate into real opportunities for business expansion.
Xi’s Long-Term Strategy: Balancing Power and Economic Growth
Xi’s personal appearance at the symposium marks Beijing’s most visible effort to restore confidence in the private sector since 2018. In previous years, China’s government had placed strict limitations on tech firms, tightening regulations on data privacy, fintech, and gaming. Now, with economic growth slowing and U.S.-China tensions escalating, Xi appears to be recalibrating his approach.
His emphasis on private sector participation aligns with a broader strategy to ensure China remains competitive in AI and other high-tech industries. The fact that Jack Ma, once seen as a cautionary tale of government overreach, was beaming in a black Mao suit at the event suggests that the tech industry may once again play a central role in China’s economic strategy.
But whether this marks a true shift in policy or just a short-term maneuver to stabilize investor confidence remains to be seen. If Beijing follows through with meaningful deregulation and financial support, China’s private sector could regain its footing as a global innovation powerhouse.
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From quiet meetups to packed arenas, AI conferences are lighting up cities worldwide in 2025. With tech leaders, investors and innovators joining forces, these events mark a turning point as the global push toward Industry 5.0 gains speed, creativity and serious attention.
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Xi Jinping’s summit signaled a shift, restoring business confidence. Alibaba’s $52B AI investment and ByteDance’s $21B push highlight China’s AI ambitions. With Beijing’s support, the nation is accelerating innovation on the global stage.