China's Xi holds rare meet with business leaders amid US tech rivalry

President Xi Jinping held a rare meeting on Monday with some of the biggest names in China's technology sector, such as Alibaba founder Jack Ma, urging them to "show their talent" and be confident in the power of China's model and market.

The tightly choreographed pro-business rally, a turnaround in Beijing's approach to its tech giants from a regulatory clampdown four years ago, reflected policymakers' concern about a slowdown in growth and efforts by the United States to limit China's technological development, analysts said.

Xi's move to gather business leaders, including those behind breakout successes despite US pressure in recent months, underscores the importance of private-sector innovation for China to gain ground in technology, they said.

"It's a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the United States," said Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong.

"The government has no choice but to support them if it wants to compete with the United States."

The private sector in China, which competes with state-owned companies, contributes more than half of tax revenue, more than 60% of economic output and 70% of tech innovation, official estimates show.

US tariffs threaten more pressure on the world's second-largest economy, which has been reeling from weak domestic consumption and a destabilising debt crisis in the property sector.

Liang Wenfeng, founder of DeepSeek, a startup that threatens to upset American AI ventures with its lower-cost AI model, attended, two sources familiar with the meeting said.

Xi called the meeting in the ceremonial Great Hall of the People, the same setting he used in 2018 for a similar meeting during the trade war at the time of the first administration of US President Donald Trump.

Xi's remarks, summarised hours later by state media, stressed continuity in China's economic development strategy. But he also said its private business had "broad prospects and great promise" to create wealth and opportunity.

China's governance and the scale of its market give it an inherent advantage in developing new industries, Xi said.

"It is the right time for the majority of private business and entrepreneurs to show their talent," he was quoted as saying in remarks state media called an "important speech".

The first state media images showed Xi speaking to assembled executives pictured from behind and aligned in rows before him. The images prompted a scramble by investors to see who was in or out among top business leaders.

Huawei founder Ren Zhengfei and BYD's Wang Chuanfu sat directly in front of Xi, images showed, seats of honour for national champions in electric vehicles and chip development.

Shares of Baidu dropped more than 8%, making it the largest loser on the Hang Seng index, after no top executive was spotted. Founders of Baidu and ByteDance were among those who did not attend, two sources familiar with the matter said.

Neither company's officials immediately responded to requests for comment.

On Friday, Reuters reported, citing sources, that Xi planned to chair the business meeting.

'SPUTNIK MOMENT' AND DANCING ROBOTS

In addition to DeepSeek, whose AI breakthrough has been described as a "Sputnik moment" for China, other participants showcased recent business success stories with a wide public following in China.

Those included Xiaomi's Lei Jun, a celebrity CEO who pushed his smartphone and appliance company into EVs, and Wang Xingxing, founder of Unitree.

One of the most popular moments of CCTV's Lunar New Year's gala broadcast featured dozens of Unitree humanoid robots dancing in a spectacle that seemed aimed at Tesla's earlier efforts and showcasing China's homegrown innovation.

Other executives present included CATL's Robin Zeng, Meituan's Wang Xing, China Feihe's Leng Youbin and Will Semiconductor founder Yu Renrong, CCTV video showed.

Tencent's Pony Ma was also there, two sources familiar with the meeting said.

'INJECT CONFIDENCE'

Tech shares in Hong Kong have jumped in recent weeks on a combination of optimism about the DeepSeek AI breakthrough and a thawing of authorities' approach to internet giants.

The Hang Seng technology index hit a three-year high in morning trade on Monday. It closed down less than 1%.

Xi first chaired a high-profile symposium for the private sector in 2018, six years after he came to power. At the time, he pledged tax cuts and access to financial backing.

Xiaoyan Zhang, a finance professor at Beijing's Tsinghua University, said Monday's meeting was intended to send a similar message about the importance of private industry and to try to "inject confidence".

"I think the purpose is to tell them we want to support you. We need you to boost innovation, technological innovation, and we need you to boost consumption," Zhang told Reuters.

Attendance by Jack Ma, in particular, has the potential to boost confidence, analysts have said.

The once high-profile entrepreneur largely withdrew from public life after the IPO of his fintech company Ant was halted by authorities in 2020 – a move triggered by a speech he gave that year criticising China's regulatory system.

His business empire and the wider technology industry were then targeted by a regulatory crackdown, and his time out of the limelight represented a reversal of fortunes for China's private sector.