Chinese President Xi Jinping’s pro-blockchain comments were credited as the main reason behind the crypto market rally that has defied all expectations since last Friday. However, Xi’s remarks also benefited local tech firms.
Shenzhen Tech Index Up to Highest Level in 8 Months
On Monday, most of the tech companies traded in China, especially those betting on the distributed ledger technology (DLT), saw their stock price surging. The Shenzen tech index jumped 5.3% today, to the highest level in eight months.
Last week, Xi said China would boost investment in blockchain. The President made this decision based on the conclusions of a study carried out by the Political Bureau of the CPC Central Committee, which held its 18th session on DLT.
Xi’s comments sparked a crazy rally in the crypto market, with Bitcoin exploding to above $10,000 for a few minutes on Saturday, after trading below $7,500 early on Friday.
But Chinese tech-related stocks benefited from the positive crypto mood as well. About 60 tech companies traded in Shanghai and Shenzhen saw their share prices surging. For example, baby-food producer Beingmate rose 6.6%. Elsewhere, selfie-app developer Meitu added 7.4%. Interestingly, Beingmate and Meitu’s connections with blockchain are barely visible.
Last year, Meitu announced that it would launch a blockchain-based facial recognition system. However, no updates have been offered since then.
In Hong Kong, the share price of Pantronics Holdings, a company that said it would rename to “Huobi Technology,” jumped as much as 67% to its daily high. At the time of writing, the stock is 20% above the open price.
Li Shiyu, fund manager at Guangdong Xiaoyu Investment Management, told Bloomberg:
Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype. It shows how much excitement can be triggered by something stressed as a priority by the top man himself.
Investors Urge Companies to Adopt Blockchain Trend
Investors in Chinese tech companies don’t want them to hesitate with the blockchain adoption. They used a Q&A platform to ask business executive about their plans to implement the technology. Some investors even try to put pressure on businesses. Thus, a shareholder of Hunan Friendship & Apollo Commercial, which operates development stores, suggested:
“Please proactively make expansion plans in blockchain to jump on state policies — doing so would be the best reward to investors.”
Earlier today, Li Wei, head of the People’s Bank of China’s (PBOC) technology, said that commercial banks should embrace digital finance by implementing blockchain.
What do you think of China’s plans to adopt blockchain nationwide? Share your thoughts in the comments section!
Images via Shutterstock
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