Chinese stocks jumped on Wall Street after Liu’s remarks, But she mostly refused Wednesday in Hong Kong. This indicates that the market remains very concerned about the growth prospects of major Chinese Internet companies, and is looking forward to more specific commitments from the government.
China’s economy is likely to contract in the second quarter, as the Covid lockdowns wreak havoc on activity. Consumer spending and factory production both contracted sharply last month, while the unemployment rate jumped to the highest level since the initial coronavirus outbreak in early 2020.
Looking at the fine print
Technology executives at the symposium welcomed Liu’s comments.
The broader US market as well It closed higher on Tuesday. The Dow Jones Industrial Average closed up 1.3%. The S&P 500 is up 2%, and the Nasdaq Composite is up 2.8%.
“While the [symposium] It didn’t include much new context In our opinion, we believe the meeting signals another positive regulatory signal towards the platform’s economy and supportive stance for Internet companies seeking to list in overseas markets,” Citi analysts said on Wednesday.
But the lack of details from Liu weighed on Asian markets on Wednesday.
Hang Seng Tech, a leading indicator of Chinese technology companies listed in Hong Kong, fell as much as 2.3%n Wednesday. The last drop was 0.3%. The benchmark Hang Seng Index closed 0.2% higher after choppy trading.
“The Chinese government appears to be running out of policy tools to support growth,” said Ken Cheung, chief Asian currency strategist at Mizuho Bank.
Cheung said the escalating downside risks to growth may have prompted the leadership to quickly end the technology campaign. But he added that it may take more time to repair investor confidence.
The latest earnings show just how much China’s tech industry continues to struggle.
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