Chinese stocks are rallying sharply higher today after the Chinese government signalled support for equity markets and called for an end to its crackdown on technology companies.
Hong Kong’s Hang Seng Index surged 9%, rebounding from its lowest close in six years the day before (March 15). Shares of Chinese technology giants Alibaba (BABA) and Tencent rose more than 20% each, while other major Chinese tech stocks also moved higher.
Earlier this week, worries about the U.S. delisting of Chinese securities, ongoing domestic crackdowns, and a new COVID-19 outbreak had sent shares in China to their lowest levels since the 2008 financial crisis.
Chinese and U.S. regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks, state media reported overnight, citing a financial stability meeting chaired by Vice Premier Liu He.
Liu also heads the central government’s finance committee and is a member of the Chinese Communist Party’s central committee politburo — the country’s second-highest circle of power.
“The Chinese government continues to support various kinds of businesses’ overseas listings,” state media reported. The government statement also said that regulators should “complete as soon as possible” the crackdown on internet platform companies that has been ongoing for nearly two years now.
The report of Wednesday’s meeting also said authorities would work towards stability in Hong Kong’s financial market as well as China’s struggling real estate sector.
In the last two years, the Chinese government has cracked down on large technology companies over alleged monopolistic practices, and real estate developers’ high reliance on debt.
Some economists said in February this year that the worst of China’s regulatory crackdown is likely over as Beijing shifts its focus to supporting economic growth.
