Growth Dragons Weekly - Jul 2023 #3
In Growth Dragons this week:
China Rebuilds Relationship With Private Sector: Tencent Pony Ma Made Rare Public Praise
What China’s Biggest Fund Manager Invested In
List of China’s Stimulus Moves
BYD Project 300% Growth in Profits for 1H2023
Tencent Is Helping Foreigners Make Payments In China Easier
China Rebuilds Relationship With Private Sector: Tencent Pony Ma Made Rare Public Praise
The Chinese Government issued a 31-point document to promote the development and growth of private sector. While China frequently releases various documents and policies, many of them tend to be lacking in specific details, similar to this one.
So why bother? The significance lies not in the content itself but in the message it conveys. We know that the Government has been imposing regulations on private companies for the past two years. Yes, it has stopped but the confidence has not been restored. This is another document to openly state that the Government is going one step further to work with the private sector and to recognize the importance of the private sector’s contribution to China’s economic growth. The tone has improved considerably.
If you can read Chinese, you can download the official document:
Even more noteworthy is the fact that Tencent founder, Pony Ma, who is typically known for maintaining a low profile, made a rare public statement shortly after the release of the 31-point document. He commended the Government's actions, describing the document as "motivating" and serves as a "beneficial guide" for entrepreneurs.
This development holds significant importance as it indicates that the Government has seemingly reconciled its relationship with China's tech giants and is now prepared to foster economic growth with their assistance.
And here is the original writing by Pony Ma:
It wouldn't come as a surprise if we witness more of these 'friendly' statements and documents being published in the future. While we understand that the Government employs these means to communicate with the public and investors, we remain skeptical that such gestures alone will be sufficient to restore investors' confidence. Investors are likely cautious, knowing that this amicable relationship could change abruptly at any time. Concrete results are necessary to instill confidence, such as permitting Alibaba to make more monopolistic moves (encouraging the flourishing of livestreaming, erecting walled gardens, and refraining from curbing consumer spending) and allowing Tencent to pursue mergers like Huya and Doyu, in addition to acquiring more companies. Ultimately, the key to rebuilding investor trust lies in witnessing substantial revenue growth and increased profits for these companies, and less meddling in their affairs.