Chinese investors like to put their money where their leaders go.
Six years ago, President Xi Jinping made a visit to Tencent Holdings’ headquarters and the internet giant was blessed with one of its best share runs until this year.
But he may have lost his magic after his latest visit to the Southern China to officiate over the opening of the Hong Kong-Zhuhai-Macau link, the world’s longest bridge.
Investors bet that Xi would have some important words to say that would excite the market. But it turned out that he is a man of few words, which prompted mainland A shares to fall back to where they were prior to a healthy 4% gain on Monday.
One company that Xi visited on Monday and that caught investors’ attention was Gree Electric, a leading white goods manufacturer based in Zhuhai.
During his visit, Xi showed why he chose to visit the Gree Electric plant in the Southern manufacturing hub.
Xi said China must develop its own manufacturing industry and technology to become a strong country, according to the People’s Daily.
“To go from a big country to a strong one, we must give paramount importance to the development of the real economy,” Xi said.
“Manufacturing is a key to the real economy, and the core strength of manufacturing is innovation, or the control of core technologies. We must seek innovation by relying on ourselves, and I hope all enterprises will work in this direction.”
His comment came amid the Sino-American trade war that has put China in a disadvantageous position, at least in part because the world’s largest nation lacks the core technology needed to dominate world trade.
Visiting Gree Electric, a model Chinese manufacturer, showed how important it is for a private local enterprise to upgrade its technological strength and level of innovation to match the demands of the world’s market.
The share price of Gree, whose chairwoman Dong Mingzhu projects a revenue target of 200 billion yuan (US$28.79 billion) for 2018, rebounded 5% before Xi’s visit, but is still down 10% year-to-date.