China’s economy in focus: Xi’s meeting with Jack Ma a signal of change?

In a move that reverberated throughout the Chinese business world, President Xi Jinping presided over a meeting with Alibaba co-founder Jack Ma and other prominent entrepreneurs on Monday, offering a strong indication of Beijing’s support for the long-marginalized private sector.

The meeting comes as China seeks to revitalize its economy amid escalating global trade tensions.

The gathering brought together some of the most influential figures in Chinese business, representing industries spanning chipmaking, electric vehicles, and artificial intelligence.

The summit underscored Beijing’s apparent shift toward a more collaborative relationship with the private sector, a key engine of the nation’s economic growth, particularly as Washington is ramping up a potentially debilitating campaign of global tariffs.

State media reported that Xi delivered a speech after hearing from representatives of leading firms, including Alibaba Group Holding Ltd.’s Jack Ma, Meituan’s Wang Xing, and Xiaomi Corp. chief Lei Jun.

The assembly also included key figures in China’s ambition to reduce its reliance on US technology, such as Wang Xingxing of robotics startup Unitree and Huawei Technologies Co. founder Ren Zhengfei.

Pony Ma, founder of Tencent Holdings Ltd., whose WeChat pioneered the “super app” concept later lauded by Elon Musk, was also in attendance, according to a person familiar with the meeting.

Furthermore, Wang Chuanfu of BYD Co. and Robin Zeng of Contemporary Amperex Technology Co Ltd. underscored China’s rapid progress in the electric vehicle sector.

A signal of confidence: boosting social sentiment

You Chuanman, a senior lecturer at the School of Law, Singapore University of Social Sciences, told Bloomberg the significance of the event:

This is the strongest signal China could release to boost social confidence. The fact that Xi Jinping himself shows up to meet with the entrepreneurs highlights the political significance of this meeting.

Chinese stocks, which had surged in recent weeks fueled by advancements in AI models like DeepSeek’s, experienced fluctuations on Monday, as investors awaited concrete details regarding the specific outcomes of the meeting with Xi Jinping.

While state media primarily focused on identifying the attending executives, the lack of detail regarding their discussions left some investors hesitant.

One notable exception was Tencent, which marked a four-year high after it debuted DeepSeek’s popular R1 model on WeChat.

Shen Meng, a director at boutique investment bank Chanson & Co., observed that “Some investors chose to take profit. Whether there will be further upside room depends on what support measures will be introduced, and it’s hard for the effects of these measures to manifest within a short period of time.”

A reversal of fortune? Ma’s journey from outcast to honoured guest

Ma’s presence at the meeting marked a notable turning point, given his experience as the highest-profile casualty of Xi’s crackdown on the internet and private sector in 2020.

That year, authorities famously scuttled the blockbuster initial public offering of Alibaba affiliate Ant Group Co., initiating a years-long effort to tighten state control over the economy, rein in the nation’s billionaire class, and shift resources towards state priorities.

Following this event, the once outspoken entrepreneur disappeared from public view.

In more recent times, authorities have adopted a less confrontational approach, particularly as the Chinese economy slowed and companies increasingly aligned themselves with Xi’s vision for technological self-sufficiency and leadership in areas like artificial intelligence.

Enabling policy? Shifting from over-regulation

You Chuanman emphasized that “It’s an ‘enabling policy’ rather than a 180-degree shift”.

He also pointed out that:

China has been pivoting from over-regulation on the property market and private sector before Covid to releasing positive policy signals to the private economy. We’ve seen a continuing shift in tone from Beijing towards the private sector: tolerance, improvement, and encouragement.

It remains unclear to what extent authorities plan to shift their stance toward the private sector.

A show of support by Xi would almost certainly add fuel to the stock-market rally and revive animal spirits among entrepreneurs, but much would depend on whether authorities follow through with more concrete policy actions.

Few China watchers expect the government to revert to its pre-2020 stance, even as it seeks to shore up the economy for a potential trade war with the US under President Donald Trump.

The complexities of China’s private sector is perhaps best shown through Ma, the former English school-teacher who created Alibaba from his lakeside apartment in 1999.

Before growing into China’s largest corporation, Alibaba vanquished foreign rivals including eBay Inc., propelling Ma’s reputation as a giant of private industry and tech innovation.

Their paths diverged again after the initial years and in 2020, Ma took the stage at a Shanghai conference and let loose with a now-infamous public tirade against the state financial sector and regulators that rankled top officials in Beijing.

They stunned Wall Street by shutting down Ant’s IPO days later — at the time, the world’s largest market debut —- before launching an assault against the rest of his empire.

Ma, who had been China’s highest-profile business leader, largely disappeared from public over the next few years.

He gradually emerged from around 2023 with occasional visits to the Alibaba campus, including one last week, as well as posts on the company’s internal employee forum.

A meeting with Xi has the potential to supercharge a reversal of fortunes for Alibaba, which alienated investors in 2023 by unveiling a grand plan to split itself into several independent sector leaders only to scuttle that blueprint and replace key executives months later.

In 2024, Joe Tsai and Eddie Wu — two of Ma’s earliest lieutenants — decided to bet big on AI.

Alibaba’s progress in that field helped the company gain more than $90 billion of market value this year.

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