By Raffaele Huang

Chinese leader Xi Jinping signaled to leading technology entrepreneurs and CEOs that he needed the private sector to deliver economic growth and self-sufficiency, more than four years after a crackdown by Beijing that dented confidence.

Many of China's most prominent businesspeople gathered in Beijing to meet Xi on Monday, according to a video shown on state television.

The scene represented both an expression of pride in China's technological advances and an acknowledgment that private entrepreneurs -- including those who built their own businesses and competed with state-owned enterprises -- were essential to China's emergence as a world economic power.

The most striking face at the meeting was Jack Ma, co-founder and longtime leader of e-commerce and cloud-computing company Alibaba, who sat in the front row of the business executives. The once-outspoken Ma was largely absent from public view in recent years after giving a speech in October 2020 that angered Xi, and his companies were at the forefront of Beijing's yearslong clampdown on the country's tech sector.

Shortly after that 2020 speech, Xi scuttled the $34 billion-plus initial public offering of Ant Group, an Alibaba financial-services affiliate. Other moves followed against private companies, especially those in the tech industry, where regulators criticized what they called disorderly expansion.

Many tech leaders stepped away from the public eye and some relinquished titles at their companies.

The crackdown led to concerns that the heavy hand of the state was chilling investment and discouraging entrepreneurs from taking chances on new businesses. Xi himself last May wondered why the number of unicorns -- startups valued at $1 billion or more -- was dwindling in China, according to the Communist Party mouthpiece People's Daily.

Alibaba's shares rose 4.3% on the New York Stock Exchange in Friday trading after Reuters reported that Ma was likely to meet the Chinese leader.

Since last fall, Beijing has been signaling support for the private sector and has announced repeated measures to boost market confidence. The economy has been sluggish owing in part to troubles in the property market.

The government is also pushing tech companies to help China achieve self-sufficiency in areas such as semiconductor manufacturing and artificial intelligence.

Monday's meeting came after President Trump imposed an additional 10% tariff on Chinese goods. In late 2018, during the U.S.-China trade war in Trump's first term, Xi met Chinese entrepreneurs to voice support for the private sector and shore up confidence.

Xi's decision to summon business leaders again, with a new trade war brewing, was a "strong gesture to tell the market and hesitant local officials that these are our champions that we need to unwaveringly support in light of all the risks," said Feng Chucheng, founding partner of Beijing advisory firm Hutong Research.

"With many of these entrepreneurs having significant stakes in the U.S., Beijing needs a united front also to prevent major capital flight," Feng said.

Zhang Jiang, former internet analyst at UBS, cautioned that the meeting doesn't necessarily mean Beijing is ready to lift its tight control over emerging technologies, especially strategically important areas such as AI. "The bigger question is whether there is sustainability in Beijing's positive shift of attitude," he said.

Monday's meeting represented an attempt to showcase areas where Chinese private-sector companies are global leaders. Attendees included Wang Chuanfu of electric-vehicle maker BYD, Robin Zeng of battery giant Contemporary Amperex Technology, Lei Jun of smartphone maker Xiaomi and Pony Ma of videogame leader Tencent.

Executives from prominent AI startups also attended, including Liang Wenfeng, founder of DeepSeek, which recently surprised Silicon Valley and Wall Street with its state-of-the-art AI programs developed with less-advanced chips.

Also present was Ren Zhengfei of telecommunications giant Huawei Technologies. Sanctioned by Washington since 2019, Huawei has become a national champion for Beijing, playing a central role in its ambition of eliminating reliance on U.S. technologies. It has expanded into new businesses and found ways to curb its dependence on American suppliers.

Write to Raffaele Huang at raffaele.huang@wsj.com

(END) Dow Jones Newswires

February 17, 2025 02:51 ET (07:51 GMT)

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