China has signaled easing of its tech crackdown — but don't expect a policy U-turn
China has shown signs of easing its crackdown on the technology sector which has wiped billions of dollars of value from its most prominent companies.
"I think the big tech companies will have a grace period for maybe the next six months," Linghao Bao, tech analyst at Trivium China, told CNBC's "Squawk Box Europe" on Tuesday.
"However, this is a really not a U-turn on the tech crackdown, the long-term outlook hasn't changed yet. Because Beijing has already come to the conclusion that it is a bad idea to let big tech companies to run wild because it creates unfair market competition … wealth will be concentrated at the top and it will start to influence politics," he said.
Since end of 2020, Beijing has introduced stricter regulation on its domestic technology sector in a bid to rein in the power of some of its biggest companies.
Rules in areas from antitrust to data protection have come into effect in a swift manner in the past 16 months. The moves have caught international investors off guard and sparked a dramatic sell-off in the stocks of domestic titans from Tencent to Alibaba.
