China’s Economy Czar Declares Support for Tech Firms Following Crackdown

China’s top economic official expressed uncommon public support for digital platform businesses on Tuesday, implying that Beijing is willing to let up on a year-long crackdown on technology behemoths as it tackles a weakening economy.

Vice Premier Liu He, President Xi Jinping’s most senior economic assistant, said following a symposium with the executives of some of the country’s major private enterprises that the government will promote the development of digital economy companies and their public listings.

According to a video uploaded online, Baidu Inc. founder Robin Li, Qihoo 360 Technology Co.’s Zhou Hongyu, and NetEase Inc. CEO William Ding were among the tech heavyweights observed at the meeting.

Liu’s remarks, as reported by state media, were brief but indicate a further reduction of regulatory risk for China’s digital behemoths such as Baidu and Tencent Holdings Ltd., as investors seek signals on whether a share crash is nearing an end.

The Hang Seng Tech Index rose as much as 6% on Tuesday, as investors hoped the conference would confirm Beijing’s plan to relax some of its restrictions.

The Chinese People’s Political Consultative Conference, an advisory group that includes some executives, sponsored the meeting between Liu and representatives from technology companies. The connection between the government and the markets “should be handled correctly,” according to Liu.

In a year marred by geopolitical instability and the severe economic effect of coronavirus outbreaks, Beijing has prioritized stability, particularly as its top officials prepare for a major leadership transition around the end of 2022 when Xi is projected to secure a third term as party chairman.