China's Tech Giants Won't Recover From Beating: Bloomberg

On the trading floors of New York and Hong Kong, there is an undeniable uptick in sentiment toward Chinese internet companies: with stocks like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. soaring from multi-year lows, talk of a new bull market is growing louder.

Photo Insert: The headquarters of Tencent Holdings

However, executives, entrepreneurs, and venture capital investors in China's tech sector see a different picture.

According to Coco Liu, Zheping Huang, and Sarah Zheng for Bloomberg News on June 24, 2022, the picture is still far from rosy, despite signals that the Communist Party's war on big tech is moderating. New restrictions enacted in 2021 restrict what firms can do and expand governmental control over businesses, forcing executives to push the corporate horse without holding the reins.

Insiders describe a continuous sense of paranoia and immobility, as well as the disquieting understanding that the sky-high growth rates of the previous two decades are unlikely to return. After years of explosive growth, Alibaba and Tencent are predicted to produce single-digit revenue growth in 2022.

Tech entrepreneurs are reluctant to start new ventures until there’s more clarity on what the government will allow.

“China’s tech crackdown has happened. There is no comeback from that,” an entrepreneur said, asking to remain anonymous for fear of retribution.

“The regulatory pressure on Chinese tech companies may have hit the brakes for now, given the sluggish economy, but it’s unthinkable that regulators in the country would loosen their grip on platform companies ever again.”

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