CNN reporter shares experience of living under Shanghai lockdown

China may be preparing to end its crackdown on big technology 2022-04-29 06:39:00

CNN reporter shares experience of living under Shanghai lockdown

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Hong Kong’s Hang Seng Index jumped 4%, while the Shanghai Composite Index rose 2.4%, after Chinese state media reported that the country’s top leaders had pledged to boost growth.

The Politburo of the Communist Party said on Friday, according to the state-run Xinhua News Agency, that they also promised to “promote the healthy development” of the Internet economy and “take specific measures” to support the sector.

The pledge follows a sweeping campaign In some of the country’s largest private companies, which began in 2020 when the government slammed the brakes over Ant Group’s last-minute plan to go public.

Analysts took Friday’s statement as a sign that the government might back off from its dramatic regulatory offensive, which criticized Industries ranging from technology and finance to gaming, entertainment and special education.

“In short, today’s Politburo meeting wants to reassure the market that the regulation campaign, which started from the end of 2020, is over,” analysts at Macquarie Capital said on Friday.

Technology stocks rose sharply in Asia with Hang Seng Tech up 10% in Hong Kong. Ali Baba (Baba) It was more than 15%, while Tencent (TCEHY) gained more than 11%.
Communist Party meeting comes as strict Covid restrictions in China Multiply Stock and currency markets, and investors are increasingly pessimistic about the impact of the shutdowns on the world’s second largest economy.

Beijing fragile

The Chinese leadership is clearly concerned about the slowdown. This is at least the second time this week that the government has pledged to reform the economy.

At a meeting on Tuesday, President Xi Jinping said the country will embark on a path Infrastructure spending Spree to increase domestic demand and promote growth.

Although markets were bullish on Friday, analysts want to see that Establish specific policies.

“The economy is in trouble, with second-quarter GDP growth likely to turn negative year-over-year. A major change in macroeconomic policy is necessary to change the course of the economy,” said Chui Zhang, President and Chief Economist at Pinpoint Asset Management.

“We will monitor the measures taken by the government in the next few weeks and update our view accordingly,” he added.

A number of investment banks lowered their forecasts for Chinese growth last month. The International Monetary Fund said last week that it expects growth of 4.4% this year, down from a previous forecast of 4.8%, citing risks from Beijing’s strict zero-Covid policy. This is well below China’s official forecast of around 5.5%.

– Laura He from Hong Kong and Beijing office contributed to this report.

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