As we progress into 2025, there’s a notable resurgence in China’s technology sector. A clear indication of this revival is the impressive near-30% surge of the Hang Seng Tech Index since the beginning of the year. This upswing is not just a random fluke; it is underpinned by rapid technological breakthroughs and a more supportive stance from the government. Major players like Baidu, Xiaomi, and Alibaba are among those experiencing the upturn. The impact is so widespread that even industries traditionally outside the tech sphere, such as telecommunications, are reaping the benefits of embracing new technological advancements. In the following analysis, we’ll dive into the driving forces behind this shift and what it means for China’s digital economy as a whole.
Policy Reset Signals New Era
A significant moment in China’s economic policy unfolded in February 2025, when President Xi Jinping convened with tech leaders. This was the first meeting of its kind since 2018 and marked a significant shift in the government’s approach. Moving away from the previous stringent regulatory measures, there is now a tangible commitment to fostering innovation. This new direction directly counters past criticism of excessive regulatory control. Xi’s engagement with tech entrepreneurs illustrates a deliberate pivot towards nurturing growth and innovation in the sector.
