Xi Jinping & Jack Ma Meeting Could Fuel China’s Stock Market Surge

Xi Jinping and Jack Ma Meeting Could Fuel China’s Stock Market Surge

A potential meeting this week between Chinese President Xi Jinping and e-commerce pioneer Jack Ma could serve as the next catalyst for China’s stock market rally, following a strong run in tech shares.

According to sources familiar with the matter, top Chinese entrepreneurs, including Ma, have been invited to engage with key government leaders. This potential show of support for private businesses coincides with a recent surge in Hong Kong equities, largely driven by advancements in artificial intelligence.

On Friday, the Hang Seng China Enterprises Index soared 4.1%, reaching its highest level since February 2022 and surpassing an October peak triggered by stimulus measures. Meanwhile, Hong Kong’s technology sector entered a bull market earlier this month, spurred by the emergence of DeepSeek’s AI model, which has been hailed as transformative.

“A high-profile endorsement like this sends a clear signal that China’s government views the tech sector as an essential driver of future economic growth,” noted Robert Lea, an analyst at Bloomberg Intelligence.

One of the major forces behind this rally is Alibaba Group Holding Ltd, whose Hong Kong-listed shares surged 6.3% on Friday, contributing to a remarkable 60% rise since mid-January. The company is set to announce earnings on Thursday, with the options market anticipating a 7.6% swing in stock price post-results—well above the historical average of 4.8% seen over the past eight quarters.

Despite the momentum, some investors caution that the rally may be overextended. However, a direct show of support from Xi would reinforce confidence in China’s $16 trillion stock market, which has been climbing steadily since mid-January.

“The current developments align with our view of a short-term trading opportunity in Chinese equities rather than a fundamental shift,” said Nenad Dinic, equity strategist at Bank Julius Baer in Zurich. “Without fresh catalysts from earnings, liquidity, or policy measures, the risk of a market pullback is rising.”

A meeting between Xi and Ma would mark a significant moment for Alibaba, given that Beijing previously halted Ant Group Co’s IPO in a move that signaled the start of regulatory tightening on the tech sector. If such a meeting takes place, it could serve as a powerful indication that the Chinese government is taking a more supportive approach toward private enterprises.

A Turning Point for China’s Tech Industry

“Having Jack Ma involved would symbolically close the chapter on China’s tech crackdown, which effectively began with him in 2020,” said Christopher Beddor, deputy research director at Gavekal Dragonomics in Hong Kong. “Regulatory restrictions have already eased, but the optics of Xi encouraging Ma and other tech leaders to grow their businesses would send a definitive message that the government’s stance has shifted.”

China recognizes that innovation is essential for boosting productivity, and Xi has repeatedly emphasized the need for “new productive forces,” particularly in response to U.S. restrictions on high-end chip exports. This has only strengthened Beijing’s determination to achieve self-sufficiency in advanced technology.

Despite recent gains, the valuation of China’s tech sector remains reasonable. The Hang Seng Tech Index is currently trading at 18.2 times forward earnings, a far cry from the 44.9 times multiple it saw four years ago.

“Chinese stocks have been priced at extremely low valuations, with most risks already factored in,” said Sandy Pei, senior portfolio manager for China equities at Federated Hermes. “The emergence of DeepSeek’s AI model has acted as a catalyst, sparking renewed optimism around Chinese equities. Even after recent gains, the market remains attractive.”

Investor sentiment in China’s tech sector has improved significantly, and the rally is now extending beyond technology stocks to industries such as electric vehicles and healthcare. This stands in stark contrast to previous years, when many investors waited for the government to intervene—whether through economic stimulus or direct market support via state-backed ETF purchases.

With anticipation building ahead of a potential Xi-Ma meeting, the market will be closely watching for signals that Beijing is fully embracing its private sector as a key engine of future growth.