Hong Kong’s Tech-Led Rally Continues on Optimistic Note
Hong Kong resumed its tech-led rally on a healthy day for Asian markets on Tuesday (Feb 18) as a meeting between President Xi Jinping and China’s top business leaders fanned hopes that a years-long crackdown on the private sector is coming to an end.
Tech Revival
The Hang Seng Index’s gains extended an impressive start to the year, with the emergence of a new chatbot from Chinese startup DeepSeek stoking optimism in the country’s artificial intelligence (AI) drive.
Offsetting Worries
The tech revival has also helped offset worries about the impact of US President Donald Trump’s hardball foreign policies and decision to impose sweeping tariffs on trade partners.
Elites Meet with Xi
Among the luminaries meeting Xi in Beijing were Alibaba co-founder Jack Ma, Huawei founder Ren Zhengfei, and Wang Chuanfu, CEO of electric-vehicle giant BYD.
Xi’s Message
State news agency Xinhua reported that Xi had "stressed that the difficulties and challenges currently faced by the development of the private economy have generally appeared during the process of reform and development, and industrial transformation." He added that Beijing was focused on removing obstacles to commerce, promoting fair competition, cracking down on arbitrary fines, and protecting business interests.
Investor Hopes
Monday’s gathering provided some much-needed relief to investors and fanned hopes for a sector revival. "This was seen as a strong signal that his crackdown on the tech sector is over and with forthcoming pro-business policies to help revive the economy," said National Australia Bank head of market economics Tapas Strickland.
Alibaba’s Rise
Ma’s inclusion hinted at the billionaire magnate’s potential public rehabilitation after years out of the spotlight following a tangle with regulators. Shares in Alibaba rose more than four per cent on Tuesday, and have now piled on more than 50 per cent since the turn of the year.
Regional Markets
Shanghai, Tokyo, Singapore, Seoul, Taipei, Manila, and Jakarta also rose.
Fed Governor’s Comments
Federal Reserve governor Christopher Waller suggested the bank could cut interest rates this year if inflation performs as it has in the past, pointing to last year’s spike in the winter followed by a quick easing.
Conclusion
As the tech-led rally in Hong Kong continues, investors are holding their breath in anticipation of further pro-business policies from Beijing. With the Hang Seng Index’s impressive gains, it seems that the worst may be behind for the private sector, and a bright future lies ahead.
FAQs
Q: What is the significance of Xi’s meeting with top business leaders?
A: The meeting is seen as a sign that the crackdown on the tech sector may be coming to an end, and that pro-business policies may be forthcoming.
Q: What are the implications of Trump’s tariffs on trade partners?
A: The tariffs may lead to increased inflation, which could lead to interest rate cuts.
Q: What is the current state of the private sector in China?
A: The sector has been facing difficulties and challenges, but the meeting with Xi may signal a turning point.
Q: What is the significance of the tech revival in Hong Kong?
A: The revival is helping to offset worries about the impact of Trump’s policies and tariffs, and is a positive sign for the overall economy.
