Sure A Not

Alibaba Group’s headline-grabbing protest tops off what’s been an extraordinary month for Chinese tech companies.

In late January, the sudden appearance of made-in-China synthetic knowledge game DeepSeek pulled the rug out from under Wall Street’s” Trump business” group. Bettors predicted that US stocks would explode as a result of the US President Donald Trump’s plans.

Trump’s eagerness for AI, which he and his patron Elon Musk, contributed to the excitement. Trump punctuated the place on January 21, when he stood shoulder-to-shoulder with OpenAI’s Sam&nbsp, Altman, Oracle’s Larry Ellison and SoftBank’s Masayoshi Son at the White House to light a&nbsp, US$ 500 billion &nbsp, Al network project.

Weeks later, it seemed like old hat as DeepSeek’s claim caught world markets off guard. Its cost-effective AI model using less advanced chips precipitated a nearly$ 600 billion selloff in&nbsp, Nvidia’s shares&nbsp, alone — history’s biggest corporate loss in market capitalization.

Then Alibaba is again on the international scene with an passion that’s even caught global investors off-guard. It includes a large force into Al, in which Alibaba is investing confidently.

The business Jack Ma co-founded claims to have invested more than$ 53 billion in data centers and other AI system projects. Apple, nevertheless, is incorporating Alibaba’s Artificial services in handsets sold in China.

But Alibaba’s march might have arms for an even bigger purpose: Xi Jinping’s selection to, in the words of scholar Stephen Jen, “make Chinese equities investible again”, starting with software platforms.

Jen, CEO of Eurizon SLJ Asset Management, says that “in some ways, this is a call for a extended bounce-back in a long-depressed and unhappy business. However, there are now many more reasons to get good than bad about Chinese stocks and China in general.

After Trump called for greater scrutiny of international companies listed in the US, Alibaba’s wave hit a speedbump on Tuesday, along with Taiwanese technology companies in general.

But from Jen’s perspective, Chinese stocks will remain on roll for reasons including: regulation easing, signs the property sector is ultimately bottoming to support better consumer sentiment, the resilience of Chinese bonds and the yuan, a serious misjudging of China’s manufacturing and industrial prowess, low valuations, and signs the world remains thin Chinese assets.

Xi’s meeting with Ma and other mainland tech founders last week helped, too. Following Xi’s crackdowns, which started with Ma’s fintech tycoon Ant Group, China’s tech scene has been in a state of corporate limbo since late 2020.

Ostensibly, Ant’s planned$ 37 billion listing was scrapped after Ma criticized Beijing, suggesting policymakers don’t understand technology. Ma alleged that regulators were stifling innovation and that banks were having a “pawnshop mentality” in a speech delivered in Shanghai.

First, Ant’s initial public offering was pulled. At the time, it would’ve been history’s biggest. Next, Xi’s financial regulator put under a microscope a who ‘s-who of tech giants: search engine Baidu, &nbsp, ride-hailing giant&nbsp, Didi Global, e-commerce platform JD.com, &nbsp, food-delivery Meituan and gaming colossus Tencent, among others.

Ma effectively entered a political exile. Last week, when Xi invited Ma and other tech billionaires to a gathering that would put Chinese technology back in the ascendancy, that appeared to change. Ma sitting in the front row and Xi shaking his hand caused investors to sift into mainland shares with an unprecedented enthusiasm.

The scene suggested that “one of the world’s greatest living entrepreneurs” is “back into the good&nbsp, graces”, says analyst Bill&nbsp, Bishop, who writes the Sinocism newsletter. Bottom line, he says, “it’s an encouraging signal for private businesses”.

Daiwa analyst Patrick Pan notes that “from a long-term perspective, we turn more positive on the outlook for the China stock market”. China’s recent tech breakthroughs and pro-business pivot, he says, are “game changers for China stock prices”.

In March 2023, Alibaba unveiled the&nbsp, biggest restructuring &nbsp, in its 26-year history, splitting into six units and exploring fundraising or listings for most of them. At the time, Alibaba said the strategy is “designed to unlock shareholder value and foster market competitiveness”.

The six units included: domestic e-tailing, international e-commerce, cloud computing, local services, logistics and media and entertainment.

The market is the best litmus test, according to former Alabaster CEO Daniel Zhang, who remarked two years ago, and each business group and company can launch independent fundraising and IPOs when they are ready.

The enterprise was bigger than Alibaba, though. It served as a case study of sorts for China Inc. as Xi’s regulators attempted to mitigate risks and halt monopolistic tendencies among tech giants.

Given that Xi and Premier Li Qiang both claim that they want private companies to create more jobs and boost a troubled economy, the situation is quite a balance.

Ma’s Alibaba was an obvious place to start. It has long been a global representation of China’s tech goals and a symptom of Beijing’s tolerance for tech billionaires spreading their wings.

Now, after years of uncertainty, says Daniel Ives, analyst at Wedbush Securities, Alibaba just “delivered an inflection point quarter”, led by a stronger-than-expected cloud business and an expanding AI push that could represent the “next gear of growth”.

AI is” the kind of opportunity for industry transformation that only comes around only once every few decades,” as current Alibaba CEO Eddie Wu put it last week.

Wu added that” when it comes to Alibaba’s AI strategy, we aim to continue developing models that extend the boundaries of intelligence” and that AI may eventually “have a significant influence on or even replace 50 % of global GDP”

When it comes to cheap Chinese valuations, Alibaba could be Exhibit A. While some profit-taking might happen, the company is still trading between 35 % to 40 % below past highs.

However, Alibaba is under increasing pressure to act in order to validate investors ‘ bullishness.

According to HSBC Holdings analyst Charlene Liu, “fundamentals will have to be back in focus” in order to increase stock prices. Alibaba shows” a clear strategy to monetize AI and accelerate cloud revenue growth and margin improvement,” as evidenced by increasing its e-commerce market share.

The real onus, though, is on Team Xi to convince global investors broadly that China’s “uninvestable” days are over for good. &nbsp,

Over the last dozen years of Xi’s leadership, Beijing has too often slow-walked moves to strengthen capital markets, reduce opacity, scale back the role of state-owned enterprises, build a globally trusted credit rating system and increase regulatory certainty.

Clearly, the return of Hangzhou-based Alibaba to favor in Communist Party circles may be its own inflection point.

Recently,” Hangzhou’s innovation model has been lauded for fostering numerous superstar technology startups, dubbed the’ Six Little Dragons’ in markets”, says Carlos Casanova, economist at Union Bancaire Privée.

This, Casanova says,” suggests China may be preparing to adopt a Hangzhou-style model that promotes both hard technology and high value-added software and services in its upcoming 15th Five-Year Plan, expected to be unveiled this October. Although we won’t know for certain until the draft is made public, it appears that China is gearing up for a strategic turn in 2026.

However, it will be simpler to persuade global funds that the multi-year tech inquisition is over. Although handshakes and rhetoric are acceptable, it is more crucial to end the regulatory chaos that has persisted recently.

According to Jeremy Mark, senior fellow at the Atlantic Council,” this will take much more than optimistic pronouncements to restore confidence after months of undelivered promises.” Beijing has long sought out foreign institutional investors, but this uncertainty is unsettling.

The volatility of recent months, though”, has given Chinese officialdom greater incentive to pursue a tightly regulated, less volatile stock market — one in which the likes of insurance companies, pension funds, and other government-run behemoths hold sway over individual investors,” Mark says.

The order of the day, Mark adds”, will be to encourage long-term investments in large companies by offering bigger dividends, share buybacks, and — ideally—steady profit growth. ” &nbsp,

Of course, some people believe that concerns about market structure are overshadowed by the attractiveness of mainland valuations. &nbsp,

” Since January, the rally in the Chinese tech sector has been stunning, though the overall A-Shares market has not risen much,” says Jen of Eurizon SLJ.

Companies outside the tech industries are trying to do the same, just as Chinese tech companies are actively looking for ways to harness the power of rapidly advancing AI. Chinese companies are generally very eager to adopt the best technologies, especially if they are cheap.”

When the” Magic Seven” is so expensive, Jen adds,” Chinese equities ought to be in good standing if the collective’I Q’ of Chinese manufacturing can keep up with the best in the world.” ” The seven companies mentioned here are Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla.

The argument isn’t always clear-cut. As mainland stocks surged last week, so did Nvidia’s.

By the start of this week, the California-based company had recovered roughly 90 % of its market valuation losses. It’s a reminder that the AI boom is no particular nation’s to lose. And that Beijing’s desire to keep control might conflict with the success of disruptors like DeepSeek.

According to Bank of America analyst Vivek Arya,” The stock may be volatile following results, but we anticipate positive momentum to resume as investors look forward to Nvidia’s leading new product pipeline and total addressable market expansion into robotics and quantum technologies at the upcoming]Nvidia ] conference.”

The macroeconomic backdrop matters, of course. The upcoming Trump trade war and the high chances that they will cause inflation are still a source of uncertainty for the world.

” The upbeat mood seen among US businesses at the start of the year has evaporated, replaced with a darkening picture of heightened uncertainty, stalling business activity and rising prices,” says Chris Williamson, chief economist at S&amp, P Global Market Intelligence.

Companies, Williamson says”, report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments. He states that the outlook for the rest of 2025 has shifted to “one of the gloomiest outlooks since the pandemic.”

Despite this, there is growing hope that Team Xi’s efforts to batten down the hatches and its exportation to global South nations will lessen its vulnerability to Trump’s bullying than many people had predicted.

China Inc. is also demonstrating that it has some serious game on playing fields Trump World takes for granted, and not just AI. Chinese biotech companies are exhibiting signs of developing drugs more quickly and affordably than their American competitors.

At the same time as Trump is empowering Tesla billionaire Musk to launch a disaster against America’s scientific research institutions, this includes cancer drugs.

In the case of Alibaba, though, investors are hoping Beijing’s multi-year battle with Chinese tech is officially over. To validate this optimism, Team Xi will need to make sure changes are being made so that the big meeting internet platform from last week is more than just a photo op.

Follow William Pesek on X at @WilliamPesek

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