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China deepens support for tech as virus limits options
China, the last major global economy sticking to a rigid zero-Covid policy, is contending with an economic slump due to prolonged virus lockdowns which have constricted supply chains, quelled demand and stalled manufacturing.
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The headquarters of Tencent, the parent company of Chinese social media company WeChat, are seen in Beijing on August 7, 2020. (AFP/Greg Baker)
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ommunist Party leaders have doubled down on support to China's tech sector in a rare meeting with executives, as Beijing changes its tack towards an industry it had suppressed until a virus rebound.
China -- the last major global economy sticking to a rigid zero-Covid policy -- is contending with an economic slump due to prolonged virus lockdowns which have constricted supply chains, quelled demand and stalled manufacturing.
That appears to have motivated a softer approach towards the vast, money-spinning tech sector, after an 18-month crackdown driven by fears its massive internet companies control too much data and expanded too quickly.
The Chinese public's ubiquitous use of apps that streamline payments with everyday needs, from transport to shopping, have contributed to China's booming so-called "platform economy" -- in which brisk commerce takes place over digital spaces controlled by tech giants.
Vice Premier Liu He and other Communist leaders addressed executives including Robin Li of Baidu -- universally used for its search engine and mapping service -- and Zhou Hongyi of internet security firm Qihoo 360, state media reported late Tuesday.
Liu offered support for "the sustainable and healthy development of the platform economy and the private economy," according to state broadcaster CCTV.
He also vowed to "support digital firms listing in domestic and foreign capital markets", CCTV reported.
Under the tech crackdown, overseas IPOs from Alibaba's Ant Group and Didi Chuxing -- China's Uber -- were summarily spiked, while millions of dollars of fines over anti-trust and data breaches were ladled out onto tech giants.
China's economic data is increasingly pointing to the dismal fallout of Beijing's zero-Covid policy.
On Monday the country said retail sales and factory output had slumped to the lowest figures since the start of the pandemic while unemployment had edged back towards its February 2020 peak.
Chinese tech shares surged late April after officials pledged support for internet firms at a Politburo meeting.
Tech giants including Alibaba, Tencent and Baidu were marginally lower Wednesday morning, with e-commerce behemoth JD slumping over 4 percent after it recorded a 3 billion yuan ($444m) loss in first-quarter earnings.
