China’s billionaires back Xi Jinping’s plan to restore economy
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China’s billionaires have stepped out of the shadows to praise the Communist party’s efforts to restore private sector confidence as Beijing attempts to recharge the economy’s faltering post-pandemic recovery.
The country’s typically low-profile titans of industry — many of whom have been hit by regulatory crackdowns in recent years — put out a series of editorials and statements on Wednesday and Thursday declaring their support for a new action plan by the party to bolster private companies.
The apparently orchestrated expression of confidence from the tycoons comes as the world’s second-largest economy is struggling with sagging private sector business and consumer confidence.
In a lengthy state media editorial, Tencent founder Pony Ma said he was “extremely excited and deeply inspired” by President Xi Jinping’s support for private groups.
The 31-point action plan, unveiled by the party and government on Wednesday, vowed to improve the business environment and treat private companies the same as their state counterparts. The measures include easing companies’ efforts to raise capital and supporting their overseas expansion.
Lei Jun, chief executive of phonemaker Xiaomi, called it a “clear policy signal” for companies to push forward with “high-quality development and contribute to the modernisation of science and technology”.
Soft-drinks magnate Zong Qinghou said his group Wahaha would “take the path of serving the country” and “not let down the party or the state” in a statement published by a Zhejiang province industry group. His words appeared under a photo of Zong wearing his red party pin.
The Zhejiang group’s social media post contained praise from 13 other local entrepreneurs, including Li Shufu, chair of carmaker Geely, and Lai Meisong, founder of courier ZTO Express.
China’s economy grew less than 1 per cent in the second quarter compared with the previous three months, prompting concern that a deep malaise in the property sector was hurting business confidence.
Private sector investment contracted year on year in the second quarter. The private sector accounts for 60 per cent of gross domestic product and 80 per cent of urban unemployment in China, making it a crucial engine of growth.
Beijing has pivoted from its two-year tech crackdown, as it seeks to encourage businesses to invest and expand amid a darkening economic outlook.
As part of its efforts to restore confidence, the government has wrapped up investigations into Tencent’s fintech arm and Jack Ma’s Ant group. Between them, they were hit with a total of Rmb10bn ($1.4bn) in fines.
Officials including Premier Li Qiang have also met top tech executives and praised tech groups’ efforts to bolster the country’s semiconductor industry.
Noting the party’s pledges for fair competition and equal protection under the law, Tencent’s Ma said the new measures “reinforced everyone’s confidence to build better and stronger companies”.
Frederic Neumann, HSBC’s chief Asia economist, said the 31 points lacked detail but represented an effort by the central government to send a strong signal to lower-level authorities about the importance of fostering private sector activity.
He said markets were waiting for a meeting of China’s ruling politburo this month in which it is expected to discuss stimulus measures. Analysts consider them necessary to kick-start the sputtering economy. “There’s a wait-and-see attitude among investors who want to see what concrete policy actions will be taken,” Neumann said.
While the document was full of praise, support and reforms to bolster the private sector, it also made clear the party would remain closely involved in business. It included calls for “improving the mechanism to shape the ideological thinking of entrepreneurs” and “deeply carrying out education on ideals, beliefs and core socialist values”.
When it came to helping the country, Ma said Tencent would take Xi’s common prosperity programme “as our strategic guide” and pledged to “deeply support national basic research” and a host of charitable endeavours.
“As a private technology group, we bear the important responsibility of promoting technological innovation and driving development,” he said.
Additional reporting by William Langley and Cheng Leng in Hong Kong and Nian Liu in Beijing
Source: Financial Times
