2023-08-16 10:38:00
Has Beijing become more conciliatory with the digital giants? After having abused it in a brutal attempt to regain control to regulate it, the Chinese authorities are now reaffirming their support for this key sector, at a time when the economy is under pressure.
In this context, Tencent reported a net profit of 26.17 billion yuan (3.3 billion euros) in the second quarter, up 41% year on year. This is its fastest rate of growth since 2021. A performance that is a sham, because last year in the second quarter, the confinement of the economic capital Shanghai and the turn of the screw targeting tech had strongly penalized Tencent’s earnings.
From one quarter to another, it only increased by 1%.
China releases disappointing new indicators, markets worried
Its turnover is, meanwhile, up 11% over one year, to 149.2 billion yuan (18.7 billion euros) for the April-June period.
A sector abused by the authorities
Like other digital giants, Tencent had not been spared by the regulatory tightening in China. This turn of the screw has lost billions of dollars in market capitalization since 2020. In addition, it has weighed on the profitability of powerful internet companies. A year ago, Tencent announced the first decline in quarterly revenue since going public in 2004.
The authorities saw with a very bad eye that two private groups, which largely dominate payment systems in China, might have such a weight in the financial system, and are not subject to banking regulations.
Essential for payments via its WeChat messaging application, the group was still fined nearly 3 billion yuan (regarding 379 million euros) last month for various breaches of banking regulations. This condemnation announced the same day as that of its competitor Ant Group (owner of the Alipay system) seems since to have marked the epilogue of the woes of the sector. ” Most of the outstanding issues (…) are now rectified “, had welcomed the regulator, suggesting the end of the vast recovery in hand.
Beijing more conciliatory
Last month, Chinese Premier Li Qiang received representatives from several technology companies to “ listen » their opinions and suggestions, for a « healthy development of the digital economy, state broadcaster CCTV reported. Representatives of the cloud computing branch of Alibaba, e-commerce champions JD.com and Pinduoduo, as well as social networks Douyin and Xiaohongshu (equivalent to Instagram) were notably present.
“I hope that many digital companies will firmly believe in the future,” said Li Qiang, quoted by CCTV. The digital economy has great potential. »
The power is now trying to reassure this sector, in a context of economic slowdown and high unemployment. Retail sales, a key indicator of consumption, rose 2.5% year on year in July, the National Bureau of Statistics (BNS) announced on Tuesday. A figure down from June and below analysts’ expectations.
Difficulties minimized?
Unemployment among 16-24 year olds has also reached record levels at over 20%. Activity has been penalized in recent months by the setbacks of several promoters with astronomical over-indebtedness, by waning consumer confidence and the global economic slowdown, which is weighing on demand for Chinese goods and therefore on activity.
If China judged its post-Covid economic recovery on Wednesday “ tortuous “, she believes that” the facts will prove wrong to those in the West who think the Asian giant is incapable of serving as an engine of global growth. ” China’s economic recovery will have to ride the waves and experience a tortuous progress, with inevitable difficulties and problems. said Wang Wenbin, a spokesman for China’s Foreign Ministry, on Wednesday.
« But we never backed down from problems, we took proactive steps to solve them, and the results were or are being seen. “, he underlined during a regular press briefing.
Asked regarding critics deeming the Chinese economic slowdown incompatible with its role as engine for the world economy, the spokesman estimated that growth, at 5.5% in the first half, remained strong. ” A small number of Western politicians and media exaggerate and exaggerate the periodic difficulties of China’s post-epidemic economic recovery. In the end, the facts will prove them wrong », said Wang Wenbin.
(With AFP)
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