China will support the sound and sustainable development of the digital economy and support digital enterprises to list in domestic and overseas capital markets, senior Chinese officials said at a closely watched meeting convened by the country’s top political advisory body on Tuesday, offering a major boost for internet companies that are facing a complex development environment.
The official remarks are seen as a clear and encouraging signal that China’s internet platforms may “embark on a new stage of development” as the government will likely move further to help boost stable development in the sector, which is increasingly essential to China’s overall economic development amid rising downward pressure, analysts noted.
China will handle the relations between development and security in “a dialectical and systemic way,” make the internet economy grow stronger and larger to better serve and integrate with the new development pattern, and promote China’s high-quality development, Wang Yang, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and chairman of the Chinese People’s Political Consultative Conference (CPPCC) National Committee, said at the meeting.
Vice Premier Liu He, who is also a member of the Political Bureau of the CPC Central Committee, said at the meeting that China will “properly handle the relations between government and market,” and support Chinese digital firms to list at home and abroad, so that opening-up could facilitate competition and in turn promote innovation.
Following news of the meeting, shares of US-listed Chinese companies recorded an across-the-board rally at Tuesday’s market opening, after diving and fluctuating for more than one year. Alibaba, Pinduoduo, and JD.com all rose by over 7 percent at the opening, with the Nasdaq Golden Dragon Index, which traces fast-growing Chinese companies, soared by nearly 6 percent.
The comments from senior officials at the top meeting sent an important, positive signal to the platform economy, Pan Helin, joint director of the Research Center for Digital Economics and Financial Innovation affiliated with Zhejiang University’s International Business School, told the Global Times on Tuesday.
“In the future, regular supervision will be the main way to set legal boundaries, which will promote the healthy and sustainable development of various economic models,” Pan noted.
The meeting also showed that China’s attitude toward the development of the digital economy is clear — that is, to encourage, support and guide, Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Tuesday.
“We should encourage and guide the rapid development of the digital economy. China will encourage anything that is legal and compliant and conducive to the development of the digital economy and the digital transformation of China’s economy and society. The next step is to promote the digital economy to make greater contributions to the national economy,” said Wang.
The digital economy has greatly contributed to China’s development goals, digital transformation and industrial upgrading, and companies in the sector — some of which recorded better-than-expected first-quarter revenue expansion— are set to play a bigger and more critical role in boosting the world’s second-largest economy amid mounting internal and external headwinds, analysts said.
As for overseas listings, Pan said that the statements of the high-level officials indicate that obstacles for the overseas listings of Chinese companies have been basically removed, further enhancing investors’ confidence toward digital and internet enterprises listed abroad.
At the meeting, CPPCC National Committee members also stressed China’s position as a major developing digital economy and said that the prospects for future development are bright.
According to CPPCC National Committee members, China needs to leverage its advantage of a new type of whole-nation system and the sheer size of market to strengthen breakthroughs in key technologies, and “hold the rights of developing digital economy autonomy firmly in our hands.”
China shall also promote the deep integration of the digital economy with the real economy, to guide the digital transformation of small and medium-sized firms and fully explore the development potential of the industrial internet, CPPCC National Committee members suggested, while adding that China should stimulate firms’ innovation vitality on the basis of guaranteeing national network and data security, and encouraging the internet economy’s international cooperation.
Despite various challenges posed by the COVID-19 epidemic and other factors, Chinese internet platforms have seen relatively stable development in recent months.
On Tuesday, e-commerce giant JD.com released its first-quarter results, with revenue of 239.7 billion yuan ($37.8 billion), up 18 percent year-on-year and beating market expectation.
The data provided a fresh piece of evidence on the vigor of China’s online economy despite broad drop in overall first-quarter retail sales.