offices in Beijing, China, on Tuesday, Jan. Signage at the Alibaba Group Holding Ltd. “For a period of time last year, there were some incorrect discussions and comments in the society, which made some private entrepreneurs feel worried,” Premier Li said at his first news conference earlier this month.
ALIBABA CHINA SERIES
Premier Li Qiang, a trusted ally of Xi who was confirmed as the country’s No 2 official this month, followed up by rolling out a series of measures intended to repair ties between the government and the private sector. In a policy shift, Chinese leader Xi Jinping recently urged the government to support private businesses, while calling on entrepreneurs to play a role in boosting growth and tech innovation, so that China can better counter what he called “containment” and “suppression” from the West led by the United States. It’s eager to shore up growth and reinvigorate confidence in the tech sector following its emergence from three years of strict Covid-19 controls.Īlibaba’s restructuring is “part of strategy to shore up confidence in the private sector,” said Hong Hao, chief economist for Grow Investment Group.
The Chinese government is now facing significant economic challenges. Alibaba’s stock is still down 70% from its peak just days before regulators abruptly pulled the Ant Group IPO.īut almost three years on, the dynamics have changed. As a result, the authorities shelved Ant Group’s planned $35 billion IPO at the last minute.Ī sweeping regulatory crackdown on Big Tech followed, which later engulfed China’s most powerful private companies, wiping huge sums off their market value. In October 2020, the once high-profile entrepreneur criticized the country’s financial regulatory system for being too rigid and unfriendly to small business. His presence is perceived as evidence of a more supportive approach to the private sector, at a time when China’s economy badly needs growth. Ma is seen as a symbol of China’s tech industry and a barometer of the Chinese government’s support for private business. (BABA), which has a market capitalization of $260 billion, soared 12% in Hong Kong on Wednesday, following a 14% surge on Wall Street overnight, leading the tech sector’s gains in the Asia Pacific. CFOTO/Future Publishing/Getty Images/FILE The Alibaba LOGO on the wall of the Century Trade Building in Shanghai, China, on March 9, 2023. “This idea is reinforced by Jack Ma’s sudden reappearance, which now seems like a planned media event intended to boost market sentiment at a critical moment.” “It appears that Alibaba’s break-up has been orchestrated by Beijing,” said Brock Silvers, chief investment officer for Kaiyuan Capital. Ma had been spending time overseas and otherwise keeping a low profile since the Chinese government began a fierce crackdown on the tech sector in late 2020. The news of the restructuring came shortly after the return of co-founder Jack Ma to mainland China. Regulators still intend to reduce the monopolistic nature of tech giants and limit their power, even as they urge private companies to do their part to create jobs and boost a flagging economy. Alibaba’s landmark restructuring has sent its shares soaring in New York and Hong Kong, as investors bet on the return of regulatory support for China’s tech industry and private businesses after more than two years of a brutal crackdown.īut the nature of the overhaul, in which the internet conglomerate will split its business into six separate units, is a sign that Beijing’s campaign against Big Tech hasn’t fundamentally changed.
0 kommentar(er)
