China’s Big Tech making a comeback with Beijing offering fresh … – The Straits Times

BEIJING - China has asked its largest technology companies to provide case studies of their most successful start-up investments in consumer, telecom and media firms, a sign that the authorities are ready to grant broader leeway in backing such deals after a crackdown brought them to a virtual halt two years ago.

Companies including Tencent Holdings and Meituan received the requests from Chinas Ministry of Commerce and the National Development and Reform Commission (NDRC), people familiar with the matter said, asking not to be identified discussing private information.

Earlier requests for case studies on the robotics and semiconductor industries were followed by a rare post by NDRC the nations powerful economic planner on its official WeChat account highlighting investments by the two companies as being aligned with Chinas goals.

While the authorities did not give reasons for requesting the new case studies, any broadening of the types of investments looked upon favourably by regulators would be a significant step towards reversing a crackdown on disorderly capital that helped erase hundreds of billions of dollars in market value from Chinas tech giants since 2021.

President Xi Jinpings government has taken several steps to rebuild confidence in the private sector in recent weeks, including by ending regulatory probes into Tencent, which runs WeChat, and e-commerce billionaire Jack Mas Ant Group.

The moves have helped spur stock market gains, though it is far from clear that a recovery in private sector confidence can be sustained given continued worries over the risk of abrupt shifts in government policy.

Regulators requested information on the investments including the ownership structure and whether they involve foreign capital, as well as potential economic and social benefits such as how the investment serves goals including carbon neutrality, rural re-vitalisation and common prosperity, one of the people said.

The selected companies in the tech giants portfolios must be in compliance with relevant regulations and have no record of violations, the person said.

Representatives of food delivery platform Meituan, the Ministry of Commerce, NDRC and Tencent did not respond to requests for comment.

China is courting private sector companies as it looks to rescue its sputtering post-Covid-19 economic recovery.

China Securities Regulatory Commission vice-chairman Fang Xinghai met some global venture capital and private equity firms to hear their worries about investment in the country, Bloomberg News reported last week.

Encouraging Chinese tech companies to back consumer-facing businesses would represent a pivot from the governments guidance of the past few years. In December 2021, the Communist Partys top decision-makers, in a briefing following a key annual conference, reined in their language around the disorderly expansion of capital.

The briefing introduced a red-light, green-light metaphor indicating how the state would seek to guide the private sectors investment decisions.

Beijing has firmly steered investors towards bets on technologies it views as key battlegrounds with strategic rivals such as the United States. US President Joe Bidens administration is planning to further tighten existing curbs by restricting inflows into Chinas semiconductor, quantum computing and artificial intelligence (AI) sectors.

Tech companies, in particular, have heeded Beijings call to develop AI, a technology with far-reaching implications for the economy and national interests.

Tencent-backed Shanghai Enflame Technology, which develops AI chips, and Rongxin Semiconductor Ningbo, a wafer-level packaging and testing operator that Meituan invested in, are among the companies NDRC mentioned in its WeChat post.

Alibaba Group Holding was also praised for its investment in e-commerce platform Huitongda Network.

Some Chinese tech companies that once operated like venture capital firms have cooled on the strategy in recent years. ByteDance dissolved its venture capital and investing team and was set to radically overhaul its separate strategic investment arm, people familiar with the matter said in 2022.

Alibaba said in May its plan to break up the company into six different units will involve dispatching about half of its investment team to the various businesses. BLOOMBERG

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China's Big Tech making a comeback with Beijing offering fresh ... - The Straits Times