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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: On the eve of every Lunar New Year, hundreds of

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Speaker 2: millions of Chinese all tune in to watch one live show,

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Speaker 2: the Spring Festival Gallup. The Gala is an extravaganza. It

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Speaker 2: often features the biggest celebrities in China and internationally. Stars

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Speaker 2: like Jackie Chan and Celine Dion have taken the stage

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Speaker 2: in previous years, but this year one performance stood out

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Speaker 2: for a very different reason.

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Speaker 3: All of a sudden, you have these sort of six

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Speaker 3: feet tall, black dancey robots dressed in bright red traditional

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Speaker 3: Chinese vest, spinning handkerchiefs with both armed.

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Speaker 2: Lucille lu is a Bloomberg reporter covering China's economy and

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Speaker 2: politics based in Beijing.

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Speaker 3: The way they moved, of course, just felt bizarre or

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Speaker 3: it was just weird, but it was definitely a very

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Speaker 3: memorable performance.

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Speaker 2: The humanoid robots are made by a Chinese startup called

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Speaker 2: Unitary Robotics, and the performance was directed by one of

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Speaker 2: the best in China, jug Yimo, who is behind the

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Speaker 2: opening and closing ceremonies of the two thousand and eight

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Speaker 2: Beijing Olympics. And Lucille says this performance seemed to be

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Speaker 2: more than just a festive celebration.

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Speaker 3: The New Year's Gala is supposed to reflect social trends,

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Speaker 3: but it's also a way to show some guesses at

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Speaker 3: the government agenda or priorities, and this performance I think

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Speaker 3: was the first time, of course, for the Year of

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Speaker 3: the Snake, that showed that the Chinese government is perhaps

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Speaker 3: warming to its tech giants.

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Speaker 2: It seems significant because China's tech giants have been sidelined

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Speaker 2: since twenty twenty when China's President Shijinping cracked down on

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Speaker 2: the tech industry, and putting the robots center stage felt

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Speaker 2: like the beginning of a reconciliation of sorts. And then

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Speaker 2: last week she did something that made a lot of

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Speaker 2: China watchers think that the tech comeback is.

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Speaker 1: Real, thinking she'd see Hotel.

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Speaker 3: President c basically sat down with many of the biggest

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Speaker 3: names in Chinese business over the past decade. So there

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Speaker 3: was Jack Ma from Ali Baba, Huawei founder Jin Jim

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Speaker 3: Fei byd but also newcomers to the scene like the

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Speaker 3: founder of Unitree Robotics that made those robots in the

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Speaker 3: Spring Gala, and also Deep Seek and I think in

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Speaker 3: many ways you know it looked like he was assembling

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Speaker 3: the Avengers team on stage.

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Speaker 2: Welcome to the Big Take Asia from Bloomberg News. I'm wanh.

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Speaker 2: Every week we take you inside some of the world's

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Speaker 2: biggest and most powerful economies and the markets, tycoons and

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Speaker 2: businesses that drive this ever shifting region. Today on the

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Speaker 2: show China's Big Tech Coming Back in from the Cold?

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Speaker 2: What does it mean for China's tech industry and its

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Speaker 2: rivals in the US. To understand how big a deal

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Speaker 2: it is to see China's president cozying up with tech

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Speaker 2: company CEOs, we have to go back to November twenty twenty.

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Speaker 2: That's when Beijing pulled the plug on the initial public

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Speaker 2: offering of ant Group, just two days before what would

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Speaker 2: have been the biggest IPO of all time.

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Speaker 3: I just remember those days in the newsroom because there

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Speaker 3: was so much disbelief over this eleventh hour hauld of

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Speaker 3: the world's biggest IPO. Jack Maa's ANT Group was set

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Speaker 3: to raise thirty five billion dollars in Shanghai in Hong

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Speaker 3: Kong and really cement his status as the richest man

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Speaker 3: in China. Before this IPO, Jack Maa gives a speech

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Speaker 3: accusing regulators of focusing too much on risk and stifling innovation.

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Speaker 3: And shortly after we know he's called Beijing, and before

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Speaker 3: you know it, this IPO is suspended and authorities are

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Speaker 3: saying that they have belatedly discovered all these shortcomings that

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Speaker 3: basically required and overhauled the company.

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Speaker 2: I mean that was shocking to both the world but

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Speaker 2: also to all of these Chinese internet companies too, right.

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Speaker 3: Yeah, absolutely, I mean looking back, that really marked the

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Speaker 3: start of the series of crackdowns on the tech sector,

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Speaker 3: primarily in the name of reigning and monopolies. And when

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Speaker 3: it was all over, it had wiped something over a

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Speaker 3: trillion dollars from the market value of some of China's

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Speaker 3: biggest tech firms. You know, we saw these very large

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Speaker 3: finds being handed to the likes of and ten Cent

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Speaker 3: DD and meanwhile state media is writing these editorials slamming

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Speaker 3: these internet companies for their preoccupation with growing traffic, you know,

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Speaker 3: at the expense of real scientific innovation. So it was

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Speaker 3: a tough time to be a tech company, especially in

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Speaker 3: the internet sector.

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Speaker 2: Lucille, what was behind the tech crackdown in the first place.

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Speaker 3: Yeah, there was certainly a sense that these companies had

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Speaker 3: grown too powerful, too influential. They had amassed millions of users,

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Speaker 3: and they gained influence over you know, every aspect of

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Speaker 3: daily life in China. So the outside powers of these

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Speaker 3: tech mocuals was being increasingly perceived as this threat to

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Speaker 3: political and also financial stability, so as being perceived by

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Speaker 3: investors as a message from the top that money needed

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Speaker 3: to align with China's national strategies, rather than the tech

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Speaker 3: companies doing what was most financially beneficial to them.

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Speaker 2: Lucille says Beijing's crackdown on the excesses of the tech

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Speaker 2: sector and private business also brought about a cultural shift

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Speaker 2: in China. It was no longer glorious to be rich,

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Speaker 2: and with that sentiment running high, business moguls like jackmw

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Speaker 2: retreated from the public. GUYE.

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Speaker 3: Jack Law was such an outspoken entrepreneur and suddenly basically

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Speaker 3: he'd gone quiet, And the next thing we heard from him,

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Speaker 3: he was at a golf course, you know, basically taking

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Speaker 3: a backseat to operating the company. So it was a

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Speaker 3: very sudden change for a lot of these tech companies

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Speaker 3: and these tech moguls.

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Speaker 2: And during the years following the crackdown in twenty twenty,

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Speaker 2: Chinese tech companies found themselves struggling with a challenging regulatory environs,

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Speaker 2: not just at home but also abroad.

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Speaker 3: They were also facing these blacklist sanctions from the US

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Speaker 3: because there was the trade war, and then the Biden

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Speaker 3: administration continued a lot of those policies. A lot of

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Speaker 3: these companies didn't come out unscathed. We saw DD and

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Speaker 3: really at a fraction of their valuation at their height.

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Speaker 3: So it was very difficult for these companies, but they

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Speaker 3: found a way to grow and survive, and so some

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Speaker 3: of them managed even in this restrictive environment to develop

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Speaker 3: new technology and make new breakthroughs.

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Speaker 2: Are there any companies that did well during this period

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Speaker 2: that stand out for you?

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Speaker 3: There were the old national champions, for example, like Huawei.

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Speaker 3: Huawei was blacklisted by the US on security concerns, but

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Speaker 3: it did double down to R and D BYD is

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Speaker 3: definitely an example of a company that's made waves overseas.

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Speaker 3: It's going head to head with Tesla in terms of

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Speaker 3: revenues and sales with its much more affordable evs.

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Speaker 2: Then there's the AI company deep Seek. It gave the

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Speaker 2: world a real surprise when it showed the event. Is

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Speaker 2: Chinese tech companies can achieve even with US curbs on

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Speaker 2: critical chips.

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Speaker 3: Deep Seak was an example of what can come out

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Speaker 3: of these restrictions. It was because of that limited number

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Speaker 3: of chips that they had access to that forced the

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Speaker 3: team to find ways to get more used from the

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Speaker 3: chips they had, and that was a defining factor and

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Speaker 3: how they were able to drive down costs.

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Speaker 2: And then fast forward to last week when President she

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Speaker 2: held a meeting with all of the big names in tech.

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Speaker 3: We just talked about and more we shall Kwami show faith.

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Speaker 3: This was a tightly choreographed pro business rally. You had

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Speaker 3: ten set sell me Wil, Semi Conductor, Huawei, just the

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Speaker 3: biggest names in China tech. But very importantly Jackmaw was there.

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Speaker 3: So when we asked investors what would it take to

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Speaker 3: regain confidence in the Chinese market, people would literally say

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Speaker 3: President c would need to sit down with Jackmaw. And

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Speaker 3: now it was really happening.

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Speaker 2: It's interesting why is Jack ma so pivotal for tech

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Speaker 2: and why did people really want to see that kind

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Speaker 2: of meeting between she and Maw.

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Speaker 3: Yeah, I think because he was such a poster child

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Speaker 3: at the tech crackdown. There's certainly a lot of symbolism

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Speaker 3: in se willing to meet with Jack Ma again and

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Speaker 3: bring him out from the cold, put back in the

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Speaker 3: good graces. And I think that sent a strong message

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Speaker 3: in the Chinese bureaucracy to lower levels that perhaps there

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Speaker 3: is a slightly different attitude now coming out of Beijing

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Speaker 3: towards its private sector.

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Speaker 2: She's sentiment shift towards China's big tech Is it for

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Speaker 2: real or is it just for show? That's after the break.

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Speaker 2: President Shi Jinping's high profile meeting with China's top entrepreneurs

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Speaker 2: last week wasn't the first ever. In twenty eighteen, at

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Speaker 2: the beginning of Donald Trump's first trade war, she chaired

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Speaker 2: a similar conference with leaders in the private sector, and

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Speaker 2: at that meeting, he expressed unwavering support for the growth

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Speaker 2: of private businesses. But the meeting was largely seen as symbolic.

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Speaker 2: We asked Katherine Thorbeck, a Bloomberg opinion columnist covering Asia tech,

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Speaker 2: to join our conversation with Lucille Liu. Catherine, this looks

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Speaker 2: like a real U turn by presidence. She he really

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Speaker 2: seems to have it in for Chinese tech companies now

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Speaker 2: they're all friendly. What's different this time around?

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Speaker 1: I think a lot has changed for the Chinese tech sectors,

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Speaker 1: and most of it hasn't been good. The US has

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Speaker 1: really put in sort of new efforts to hold back

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Speaker 1: Chinese tech sector this time, whether that's export controls, hip restrictions.

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Speaker 1: So chinae tech sectors coming out of those headwinds.

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Speaker 2: Lucille, you're on the ground there. What changes have you seen?

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Speaker 3: Yeah, I mean a lot has happened in the intervening years.

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Speaker 3: You know, there was the COVID lockdown of property crisis

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Speaker 3: that's still ongoing. You know, demographic challenge unges, and you

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Speaker 3: know a sluggish economy where consumer sentiment is still weak.

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Speaker 3: So Presidency knows he needs to boost confidence and send

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Speaker 3: the signal for the bureaucracy that China needs to support

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Speaker 3: its private firms and especially in the tech sector. And

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Speaker 3: by Bloomberg Economic calculations, the high tech industry contributed to

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Speaker 3: fifteen percent of GDP last year and it's set to

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Speaker 3: overtake the housing sector in twenty twenty six.

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Speaker 2: So very very important to China's success and certainly economic

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Speaker 2: well being, especially as it tries to write the economy.

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Speaker 3: Yeah, that's absolutely right.

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Speaker 2: So the Chinese government has been scrutinizing the tech sector

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Speaker 2: in the last couple of years, particularly the tech giants

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Speaker 2: that perhaps are seen is too powerful by the party,

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Speaker 2: But now here it is extending an olive branch. Lucille,

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Speaker 2: do you sense that the tech companies are really buying

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Speaker 2: it this time or are they skeptical? Yeah?

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Speaker 3: I think that that moment the meeting, it seems to

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Speaker 3: really capture this moment where it's private or tech interests

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Speaker 3: and maybe the party's own interests align and where See

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Speaker 3: thinks the tech sector do something for them, and of

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Speaker 3: course the tech sector is more than happy to benefit

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Speaker 3: from state support. It's a point in the relationship where

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Speaker 3: I think there are some common interests, but of course

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Speaker 3: we've seen in the past the interests often diverge.

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Speaker 1: Yeah, I would agree. I think it's going to be

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Speaker 1: really hard for people to not see this as a

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Speaker 1: bit of a publicity stunt. If this isn't followed up

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Speaker 1: by actual sort of policy changes, it's hard to tell

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Speaker 1: if this gesture of goodwill will be sustainable or if

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Speaker 1: it's more ephemeral, and I have a feeling it might

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Speaker 1: not last. You know, I don't see she ultimately being

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Speaker 1: okay with these private sector leaders having so much power

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Speaker 1: and threatening his political grip. So I think we will

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Speaker 1: have to see if this is followed up by actual

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Speaker 1: policy changes. At the same time, there though, I think

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Speaker 1: she would be wise to sort of recognize that most

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Speaker 1: of the best innovations that have come out of China

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Speaker 1: have really come from the private sector. They haven't really

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Speaker 1: come from his sort of state owned in state enterprises.

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Speaker 2: And you've got innovations like Deepseek's ai chatbot that recently

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Speaker 2: caught global investors by surprise. Let me change the perspective

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Speaker 2: a little here and ask you why do you think

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Speaker 2: the US keeps getting surprised by Chinese tech.

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Speaker 1: I think some of it is language barriers and cultural

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Speaker 1: barriers and few foreign reporters actually in China, and separate

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Speaker 1: social media ecosystems. But I also think that there's some

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Speaker 1: entrenched biases in the US and in Silicon Valley when

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Speaker 1: it comes to China, and there's definitely a bit of

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Speaker 1: sort of sinophobia. And I think, you know, US tech

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Speaker 1: leaders paint themselves as the only people that can really

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Speaker 1: predict future trends and see the future. They've always had

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Speaker 1: this presumed lead over Chinese tech, and so I think

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Speaker 1: that there's a lot of barriers that the US has

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Speaker 1: to really understand in China, and I think that it's

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Speaker 1: important for Silicon Valley to sort of break those down,

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Speaker 1: otherwise they will keep being surprised.

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Speaker 2: You called them the US tech rolagarchy in a recent column.

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Speaker 2: Can you explain that to us? So?

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Speaker 1: I do have to give credit to my editor for

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Speaker 1: adding that in, but it is it's just so applicable

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Speaker 1: to this moment we're seeing in US tech right now,

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Speaker 1: where these tech billionaires, these very powerful business leaders have

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Speaker 1: just been positioning themselves and trying to get very close

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Speaker 1: to the Trump administration, and that's just been giving them

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Speaker 1: even more power and more influence.

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Speaker 2: And at Donald Trump's inauguration in January, he was surrounded

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Speaker 2: by all of these tech titans. You had Mark Zuckerberg,

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Speaker 2: Jeff Bezos, Tim Cook, and of course Elon Musk. Do

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Speaker 2: you see any similarities between this US tech roly garchy

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Speaker 2: and what happened with the recent meeting in China.

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Speaker 1: It does seem like she responded to Trump showing up

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Speaker 1: with his tech leaders to show that he also has

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Speaker 1: this sort of the port and he also has some

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Speaker 1: very powerful tech players in his ecosystem. But at the

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Speaker 1: same time, I don't think that he would allow them

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Speaker 1: to have the same kind of power and political influence

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Speaker 1: that they're having in the US right now.

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Speaker 2: Right and certainly Silicon Valley and Washington d C. Are

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Speaker 2: worried about China's tech over national security and other issues.

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Speaker 2: So now you've got these Chinese tech companies appearing to

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Speaker 2: be back in the good graces with President Shi Jinping

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Speaker 2: and on the rise in China, but there's still somewhat

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Speaker 2: second string to American firms.

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Speaker 1: Right What are the.

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Speaker 2: Biggest challenges for Chinese tech companies as they try to

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Speaker 2: close that gap.

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Speaker 1: I think that we've learned from the TikTok saga, which

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Speaker 1: has just raged on for years, that at this point

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Speaker 1: Washington and US lawmakers really see any sort of consumer

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Speaker 1: facing tech product coming out of China as a potential

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Speaker 1: national security threat. They see any Chinese tech company is

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Speaker 1: potentially connected to the government, their success is a vouch

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Speaker 1: for their political system, and you know, threat to democracy everywhere.

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Speaker 1: And I think whether or not that's true, I think

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Speaker 1: we'll still see these Chinese tech companies producing these innovations,

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Speaker 1: and I do think, you know, if they want to

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Speaker 1: find a way to grow in the US market. That's

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Speaker 1: going to be a real challenge ahead, and I don't

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Speaker 1: think any of them, as we've seen from TikTok, have

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Speaker 1: really figured that out yet.

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Speaker 3: I think the political wines in daging are always a factor.

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Speaker 3: We've seen them swing. There's been a lot of whiplash

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Speaker 3: in the industry where things have gone one way and

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Speaker 3: then the other. So I think very reasonably for a

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Speaker 3: lot of these tech firms, there is still questions over

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Speaker 3: sort of Beijing's commitment to continue to to support them.

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Speaker 2: This is The Big Take Asia from Bloomberg News. I'm

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Speaker 2: wan Ha. This episode was produced by Young Young, Naomi

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Speaker 2: and Jessica Beck. It was edited by Patty Hirsch, Daniel

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Speaker 2: ten Kate, and Jenny Marsh. It was fact checked by

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Speaker 2: Naomi and Young, mixed by Amer Salton, and sound designed

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Speaker 2: by Jessica. Our senior producer is Naomi Shaven. Our senior

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Speaker 2: editor is Elizabeth Ponzo. Our executive producer is Nicole Beemster Bower.

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Speaker 2: Sage Bowman is Bloomberg's head of Podcasts. If you like

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