China’s unexpected display of warmth towards entrepreneurs has sparked widespread uncertainty among executives. When President Xi Jinping met with top business leaders last week, he seemed to be in good spirits, signaling support for the private sector and boosting investor confidence.
However, interpretations of the meeting vary widely. Some question whether this sudden change is a sign of genuine reform or just a temporary reprieve from China’s economic struggles. The country has been plagued by chronic issues such as deflationary pressures and weak demand, which economists like Xu Chenggang believe cannot be solved solely by artificial intelligence models like DeepSeek.
Xi Jinping has expressed high hopes for private enterprises, urging them to “firmly position themselves as builders of socialism with Chinese characteristics.” But many businesspeople worry that the government’s intentions remain unchanged, and that Beijing could still meddle in businesses under the guise of supporting them. The market reaction to the meeting was seen as overly optimistic by one venture capitalist.
Despite Xi’s rhetoric, his economic thinking remains focused on a bigger role for the state and smaller role for the market. Historically, this approach has led to pro-business policies being rolled back, stifling China’s most successful tech companies. As the country struggles with artificial intelligence’s growing influence in its geopolitical rivalries with the US, it remains to be seen whether Xi’s newfound warmth towards entrepreneurs will translate into lasting reforms.
China’s state media and government have hailed DeepSeek as a potential driver of economic growth, but some experts warn that this may come at the expense of other AI companies. The founder of an AI start-up acknowledged that DeepSeek’s success is significant for China, but also noted that it would divert funding away from smaller competitors.
As the government prepares to announce more substantial policies during parliamentary sessions in March, investors are holding out hope for concrete actions. However, for now, the future of Xi’s business initiative remains shrouded in uncertainty.
Source: https://www.nytimes.com/2025/02/22/business/xi-jinping-jack-ma.html