China's National Development and Reform Commission (NDRC) recently praised Tencent, Alibaba, Tencent, and Meituan for a big shift in the tech sector. This move follows the end of a three-year crackdown and highlights the companies' contributions to tech innovation, particularly in areas like semiconductors and autonomous driving.
China Praises Tech Giants For Improving Tech Progress
China's NDRC, in a recent statement, lauded the tech companies for their crucial roles in advancing areas of technological innovation prioritized by Beijing, including semiconductors and autonomous driving.
According to South China Morning Post, the NDRC highlighted Tencent's investments in cloud computing and Meituan's foray into semiconductors, as well as Alibaba's efforts in digitalizing agriculture.
This positive stance signals a significant shift in China's relationship with its technology giants, following a prolonged crackdown that led to substantial fines and market value decline for these companies.
Post-Crackdown Recovery
Since the Chinese government began softening its approach earlier this year, the private sector has received reassurances as efforts to revive the economy after the COVID-19 pandemic are underway.
Last week, the NDRC also engaged with private firms like Baidu. President Xi Jinping has emphasized that China has been seeing gradual improvement in the development of "hard" technologies including AI and microchips.
The reason why Beijing wants to continue this improvement is to avoid being dependent on Western countries when it comes to tech supplies.
As such, the economic planner of China believes that it's the start of a positive market for the tech sector as the shares of Tencent, Alibaba, and other firms skyrocketed recently.
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Game-Changer For Investors and Endorsers
The NDRC's recognition of the companies' contributions to priority areas of tech innovation not only bolsters their reputation but also instills investor confidence. This public endorsement signifies a shift in the regulatory landscape, suggesting that the intense crackdown on violations may be subsiding, per Reuters.
With the Chinese government embracing technology and promoting domestic innovation, Tencent, Alibaba, and other firms stand to benefit from increased opportunities and a more supportive environment.
The market's positive response, as indicated by share price gains, reflects investor optimism regarding the future prospects of these technology giants.
China's Path to Technological Self-Reliance
The recent NDRC statement reflects this broader objective and showcases China's commitment to nurturing a robust technology sector. By praising Tencent, Alibaba, and other private firms, China aims to foster an ecosystem that fosters innovation, propels economic growth, and ensures national security.
While China is racing against time when it comes to technology, a researcher claimed that the country was lagging behind the AI race because of its "lack of vision."
An April report from Tech Times said that the lack of investment by China in the AI industry put them at the back. Since it's a significant element of research, China missed a lot of opportunities that could have been translated into meaningful breakthroughs.
