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Alibaba (NYSE:BABA), JD.com (NASDAQ:JD) and Baidu (NASDAQ:BIDU) surged in premarket trading on Friday after a Chinese state-run news outlet reported that the Chinese government may end its regulatory crackdown on internet companies in an effort to help the suffering economy.
The South China Morning Post, citing two sources briefed on the situation, reported that the government will have a symposium with the country’s largest tech firms and tell them that they will stop the regulatory push. The symposium has reportedly been set for Labour Day holiday, which starts on April 30 and runs until May 4.
Alibaba (BABA), Tencent (OTCPK:TCEHY), online delivery service platform Meituan and TikTok’s parent company, ByteDance (BDNCE), are invited to the symposium, the news outlet added.
Alibaba (BABA), JD.com (JD) and Baidu (BIDU) shares surged, all gaining more than 10% in premarket trading, led by JD.com’s 13.5% gain.
A number of other Chinese tech stocks jumped early Friday as well, including Pinduoduo (PDD), Bilibili (BILI), NetEase (NTES), Kingsoft Cloud (KC) and DiDi Global (DIDI) most of which saw double digit percentage gains.
Separately, Bloomberg reported on Friday that regulators from Beijing are discussing with their American counterparts how to allow on-site audit of Chinese companies listed in New York.
Earlier this month, the China Securities Regulatory Commission confirmed plans to revise confidentiality rules in regards to overseas listings in a move that could help Chinese companies avoid being delisted in the U.S.
The news comes just days after the Cyberspace Administration of China reportedly held off on imposing fines and other penalties upon DiDi Global (DIDI) over its New York-based initial public stock because some high-level officials in the Beijing government felt the fines weren’t strong enough.
Earlier this month, the Central Cyberspace Administration of China said it would start a two-month “special action” to curb illegal content on streaming and short video sites amid a broader crackdown on the country’s live streaming industry.
The Chinese government also recently approved the first group of video game licenses since July 2021, distributing a list of approved titles to developers, another sign that the regulatory headwinds Chinese tech firms have faced over the past several months are easing.
Earlier this month, Charlie Munger’s Daily Journal Corp. (DJCO) disclosed that it had cut its stake in Alibaba in half.