Chinese Premier Li Qiang met with senior executives from the country’s leading technology firms including Alibaba Group Holding Ltd and ByteDance Ltd on Wednesday (July 12), in a signal that Beijing is ending its crackdown on the industry amid a weakening economy.

Representatives from food delivery platform Meituan and Xiaohongshu Technology Co, a popular Chinese Instagram-like social media platform, also spoke at the meeting, while JD.com Inc and budget shopping platform PDD Holdings Inc submitted written speeches, state broadcaster CCTV reported. 

Li urged local governments to provide more support to the Internet firms, calling them “trailblazers of the era,” while pushing the companies to support the real economy through innovation. He also pledged to create a fair environment and reduce compliance costs in order to promote the sound development of the platform economy.

Chinese officials have sought to rally private enterprise to boost their investment in order to fire up the world’s second-biggest economy, which lost steam in June. Manufacturing contracted again, while other key components such as exports and consumer spending were sluggish.

In recent days, the government has been taking steps to bolster the economy without the use of major stimulus, such as urging banks to extend loan relief to developers to aid the property market. President Xi Jinping called for greater opening of the economy to focus on foreign cooperation in areas including trade and investment.

The Communist Party’s evolving stance toward the private sector has become one of the most closely watched developments in global markets in recent years, with some observers even calling China’s sprawling internet sector uninvestable.

The government’s two-year crackdown on leading internet platforms began after Alibaba co-founder Jack Ma critiqued Beijing’s regulation of the financial sector in 2020, forcing Ant Group Co to pull the plug on what would have been the largest initial public offering in history. Its valuation, envisioned at about US$315 billion after the IPO, has dropped to about US$78.5 billion. Alibaba, China’s largest e-commerce company, split into six business units as part of a plan to recharge growth.

Beijing has been easing scrutiny of major tech companies to help the country’s post-Covid recovery. Chinese authorities ended probes into tech giants after levying fines on Ant Group Co and Tencent on Friday.

Earlier Wednesday, China’s top economic planning agency praised major online platforms including Tencent Holdings Ltd and Meituan for investing in innovative projects.

  - Bloomberg