Following years of pressure on the IT industry, Chinese President Xi Jinping’s meeting with business leaders, including Jack Ma, sparked bets for a policy change, which caused markets in China and Hong Kong to rise on Tuesday, with tech shares leading the gain.
By lunchtime, the Hang Seng Tech Index had risen 3% to a new three-year high, extending the month-to-date gains to more than 30%. After official media CCTV showed Alibaba founder Jack Ma and President Xi shaking hands during the meeting on Monday, the index heavyweight jumped 4.3% to a level over three years high.
Following their CEOs’ attendance at the meeting with Xi, Xiaomi surged almost 6% to a record high, while Tencent gained 3.4% to its highest level since 2021. The Hang Seng Index reached its highest point since early October 2024, rising more than 2%.
In a rare meeting with some of the leading figures in China’s technology industry on Monday, Xi encouraged them to “show their talent” and to have faith in the strength of China’s market and model. Xi added that private enterprise had “broad prospects and great promise” to generate opportunity and riches.
UBS Global Wealth Management analysts noted, “We believe the symposium signals the end of the crackdown, potentially eliminating one of the longest-lasting overhangs on the sector’s performance.”
According to them, the Chinese tech sector’s superior performance compared to the whole market coming forward would be primarily driven by Xi’s support for innovation-related businesses, continued macro policy assistance, and other essential advancements.
On Tuesday, onshore markets also increased. The Shanghai Composite Index increased by 0.3%, while China’s blue-chip CSI300 Index increased by 0.4%. This year, both metrics are at their most significant points to date.
