China is capable of hitting its growth targets, according to the conference speaker
Jack Ma returned to China after 25 years of tech monopolism, the first public appearance of the chairman of Alibaba and the launching of the Ant Group
Shortly after his return, Alibaba announced a landmark restructuring to split its business into six separate units. Analysts said that both could be included in Beijing’s plan to boost market sentiment.
Beijing fears that private tech firms have become too powerful. During its years-long clampdowns, the government sought to reduce the monopolistic nature of many prominent tech companies, slapping them with big fines, banning apps from stores and demanding that some firms completely overhaul their businesses.
Jack Ma, co-founder of the Chinese e-trade giant Alibaba, returned to China this week for the first time in more than a year in a rare public appearance.
“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.”
The Chinese leader called on Entrepreneurs to be more active in boosting growth and tech innovation so that they can counter the negative influence of the West on their country.
In October 2020, the once high-profile entrepreneur criticized the country’s financial regulatory system for being too rigid and unfriendly to small business. At the last minute, the authorities put on hold the $35 billion IPO of the Ant Group.
China’s most powerful private companies saw huge sums of their market value wiped off when the regulatory crackdown on Big Tech began. The stock ofAlibaba is still 50% below where it was a few days before the regulators pulled the IPO.
After he was confirmed as the country’s No 2 official this month, premier Li Qiang followed with a series of measures that were supposed to repair ties between the government and the private sector.
The Boao Forum for Asia (BFA): Premier Li’s Preliminary Report on Economic, Business and Regulatory Issues
“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.
“Tencent is the obvious [one] next,” Hong said, adding that the social media and gaming giant has already started reducing its stake in portfolio companies, including food delivery company Meituan.
The move marks the most significant overhaul in the company’s 24-year history and will “unlock the value” of its various businesses, it said on Tuesday.
Six units will be created for the business: domestic e- Commerce, international e-Commerce, cloud computing, local services, logistics and media and entertainment.
The market is a good litmus test for business groups and companies, and can be used to determine if a company will pursue an IPO or not, according to an email from the CEO.
Citi analysts said Tuesday their target price for Alibaba’s US-listed stock was $156 per share, which is nearly 60% higher than Tuesday’s closing level.
Li’s efforts to paint an optimistic picture about China’s outlook come as he rolled out intensive measures to lift foreign confidence and repair fraught international ties at a time of unimpressive growth.
“The [economic] performance in March is even better than January and February’s,” Li said, adding that major indicators such as consumption and investment are improving.
China, he said, will roll out new measures to boost domestic consumption and increase market access for foreign business while ensuring the stability of the financial sector.
The country is confident and capable of hitting this year’s GDP growth target, Li said in an interview with Kristalina Georgieva.
The Boao Forum for Asia has been held annually since 2001, but was suspended in 2020 because of the pandemic. The first fully offline session in three years will take place at this year’s meeting.
Prominent attendees this year include Singapore’s Prime Minister Lee Hsien Loong, Malaysia’s Prime Minister Anwar Ibrahim, and Spain’s Prime Minister Pedro Sánchez.
The Chinese Economy: A Brief History of the Depression, the Economic Recession, and the Decline of the Second Order Left by the Communist Party
The slowdown was caused, in part, by systemic issues that have haunted the economy for years, such as massive debt levels and a shrinking work force. The problems have been made worse by the Communist Party and its zero- Covid policy, which ended late last year.
Weak business confidence and a slump in investment are a result of the measures. The youth unemployment rate was over 18% last month.
For the first time in 25 years, the American Chamber of Commerce in China found in its annual survey of members that fewer than half of the respondents regarded China as one of their top three investment destinations.
The number of business that says they plan to leave the next three years has doubled according to the survey done by the AmCham in Hong Kong.
