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China's vice premier Liu He advocates technology and government cooperation

After years of crackdowns, Beijing changing its tune on the industry

The vice premier of China and Xi Jinping's economic right hand man, Liu He, has offered a rare show of support to China's tech industry – both domestic and abroad.

According to state-sponsored media, Liu told around 100 members of the Chinese People's Political Consultative Congress (CPPCC) it is important to have a good relationship between the government and tech, and to research and support specific measures that grow the platform economy.

"It is necessary to wage a successful battle for the strategic ground of critical core technologies," Liu said, according to Xinhua news agency.

The economic advisor referred to entrepreneurs as "the most important agents of innovation" and advocated for a digital economy that supports an opening to "the outside world" using "openness to spur competition and competition to spur innovation."

Beijing has been on a continual campaign to crackdown on the tech industry – regulating everything from gaming to listing offshore to how platforms store their data and anticompetitive behavior.

Some platforms have left willingly, like LinkedIn and Yahoo!, while others have been kicked out, like Chinese ride-hailing app DiDi Chuxing, which was removed from local app stores.

But the effects of US sanctions and strict COVID lockdowns, like the ongoing one in Shanghai, have taken their toll.

This week e-commerce company detailed its troubles on its Q1 2022 earnings call, blaming its slowest-ever growth on the lockdowns, which have not only shut down factories but also caused havoc in transportation and logistics.

It's not just domestic companies feeling the effects. Apple CEO Tim Cook said in the company's Q2 earnings call that freight from China was posing a "huge challenge" for getting components and products out.

Amid this environment, Beijing seems to be changing its tune. In April, it approved its first new video game licenses in nine months. A month earlier, the government declared it was entering a new era of digitization.

And as for Liu's speech, many see it as a sign that the authorities are looking to further loosen Beijing's reins on the industry. ®

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