Threatened by a fall in activity, the Chinese government on Friday gave its support to the digital economy, raising hopes of a patching up with this sector which has been under pressure for months.
While Shanghai, the economic capital of the country, has been paralyzed since the beginning of April by a resurgence of Covid, Beijing is stepping up its actions to try to support the economy.
The communist regime has thus sent a reassuring signal to powerful companies in the internet sector, in its crosshairs since the end of 2020, between blocking IPOs internationally or fines for abuse of a dominant position.
At a meeting of its Political Bureau (politburo), the ruling Chinese Communist Party (CCP) raised hopes of reconciliation with this important part of the world’s second largest economy.
According to a report by the New China Agency, at the meeting, chaired by number one Xi Jinping, the CCP deemed it “necessary to promote healthy development of the digital economy” and “complete its rectification”.
“The anti-monopoly reforms may be over,” hoped economist Zhiwei Zhang of asset manager Pinpoint Asset Management.
The politburo, a 25-member body that holds the real power in China, also pleaded to “respond to market concerns in a timely manner”.
– Threatened growth –
It was enough to make the titles of the major groups in the sector soar on the Hong Kong Stock Exchange: Alibaba and JD.com, giants of online commerce, both rose by more than 15%, while Tencent, owner of the ubiquitous WeChat app, took 11%.
The Hang Seng index ended up more than 4%. The Shanghai Stock Exchange gained 2.41% and that of Shenzhen, more focused on technology stocks, 3.89%.
Beijing has also reaffirmed its economic targets, despite the resurgence of the epidemic which raises fears that it will not be able to achieve its growth target of 5.5% of GDP this year.
“The key message is the change in political priority: in recent weeks it has been about eradicating the outbreaks of Omicron. Now the objective is to achieve a balance between the health imperative and the economic growth,” said Zhiwei Zhang.
The zero Covid strategy is increasingly contested by the business community, which is alarmed by the threats that repeated confinements pose to transport, supply chains and the workforce.
“The government has become aware of the risk of seeing supply chains leave China,” said Mr. Zhang, for whom the Covid zero could be relaxed in order to facilitate business travel.
– Loss of “credibility” –
Since the spring of 2020, China has reduced international entries to a minimum, and travelers entering the country are subject to a long quarantine.
“China is losing its credibility as the best place in the world to get supplies,” warned the president of the EU Chamber of Commerce in China, Joerg Wuttke.
“A lot of companies are restructuring their supply chains,” he said in an interview published Thursday on Swiss website The Market.
Mr. Wuttke calls it “tragic” “the impasse in which the president has put his country” with zero Covid and predicts that growth will not exceed 4% this year.
Chinese leaders also called on Friday for a healthy development of the real estate sector, another pillar of the national economy in difficulty following a tightening of regulations.
Real estate developer Evergrande has been struggling for months on the verge of bankruptcy, with a slate estimated at 260 billion euros.
Beijing has already announced this week “all-out” efforts to revive infrastructure, at the risk of multiplying unnecessary projects and increasing the indebtedness of local authorities.
But these projects will not be enough to quickly revive activity, warn economists.
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