China tech rally presses ahead as Xi’s meeting spurs bets of policy shift

HONG KONG: Chinese tech stocks continued to rally on Tuesday on optimism that President Xi Jinping’s rare meeting with the country’s tech entrepreneurs foreshadowed a regulatory U-turn after years of a sector-wide crackdown.

The Hang Seng Tech Index climbed 2.5% to close at a fresh three-year high and bring the gains for the past month to over 30%. The overall Hang Seng Index jumped 1.6% to its highest since early October.

Index heavyweight Alibaba surged 3.3% to a near three-year high after state media CCTV showed Xi and Alibaba founder Jack Ma shaking hands at the meeting on Monday.

Tencent jumped 2% to its highest since 2021 and Xiaomi rallied over 7% to a record high.

Their executives were among the high-profile Chinese tech leaders at the symposium which was considered a signal that private enterprise could be treated kindly and that a crackdown on tech giants is over.

“We think the symposium marks an end to the crackdown, potentially removing one of the longest-lasting overhangs on the sector’s performance,” analysts at UBS Global Wealth Management said in a note.

Xi’s support for innovation industries, ongoing macro policy support and other fundamental improvements will be crucial drivers of the Chinese tech sector’s outperformance against the broader market from here, they said.

Wall Street banks such as Goldman Sachs, Citi and Bank of America have changed their stance on China since the DeepSeek-triggered tech rally, saying the bull case is getting stronger for Chinese stocks due to the AI breakthrough and Beijing’s pro-business shift.

On the day, however, the onshore markets closed lower as investors booked profit after early-session gains. The blue-chip CSI300 and the Shanghai Composite indexes fell 0.9% each after hitting their 2025 highs earlier in the session.