China Tech crackdown: Global funds exit is forcing regulators to call for a rare meeting as the economy falters.

In an effort to persuade foreigners to continue investing in the second-largest economy in the world despite its recent weakness and mounting geopolitical tensions, China’s financial authorities have invited some of the wealthiest investors in the world to a rare symposium next week, according to three sources.

The invitation documents showed that the meeting will take place in Beijing on Friday and will be centred on the state of U.S. dollar-denominated investment enterprises in China right now and the primary issues they are facing.

The event is taking place at a time when international banks and investors are issuing warnings that optimism regarding China’s economic outlook is dwindling. The nation’s post-pandemic recovery is sputtering out swiftly, and Sino-U.S. ties are at an all-time low due to national security issues like Taiwan, American export restrictions on cutting-edge technologies, and China’s centrally planned industrial policies.

Such meetings are uncommon and show Beijing’s desire to boost trust among foreign investors. The meeting’s agenda was clear and focused on discussing the difficulties that foreign fund managers face while investing in China.

Large foreign and domestic fund managers, such as general partners (GPs) in private equity companies and their limited partners (LPs), such as sovereign wealth funds and pension funds, are anticipated to attend the meeting, according to the sources.

They will be expected to discuss their perspectives on the economy and offer solutions to aid with issues plaguing their enterprises in China.

Although some senior executives will fly to China for the meetings, the sources said that the international funds that would attend will likely send their senior staff members who are located there.

One of its poorest years in recent memory, China’s GDP grew by just 3% in 2022 as a result of the stringent COVID regulations. After the curbs were abruptly lifted, activity quickly recovered, but since then, momentum has sharply declined due to increased policy uncertainty and tensions between China, the United States, and other Western powers.

The meeting also takes place at a time when some PE firms and their investors are reevaluating their China strategies in the wake of a brutal crackdown on private businesses like tech companies that lasted for years and cast a long shadow over PE investors’ prospects for returns and reduced their investment options.

The Ontario Teachers’ Pension Plan, the third largest pension fund in Canada, said in January that it was halting all further direct investments in Chinese private assets.

Fang Xinghai the deputy chairman of the China Securities Regulatory Commission, the nation’s securities regulator, will speak to the audience.

Asset Management Association of China, the country’s fund regulator, organized the gathering.

An 8-month low in the yuan and months of poor economic data have caused some investors to abandon their China strategy, with the MSCI China Share Index down 2% on the year compared to a 15% rise for global stocks.

Data from industry tracker Preqin showed that venture capital and PE firms with a focus on China raised the least amount of money this year and during the first half of the year in the previous ten years.

Preqin data revealed that China-focused GPs only raised $5.5 billion in capital in US dollars during the first half of the year, a significant decrease from the peak of $27.6 billion raised during the same period in 2021.

Andrew Collier the managing director at Hong Kong-based Orient Capital Research said China’s policies, such as security crackdowns, its strict supervision of the IT industry, and its careful monitoring of foreigners, are forcing many international corporations to stay away from the country.

“There is a new charm offensive to persuade foreigners to come back now that the economy is drastically slowing,” he said, adding that the efforts “might come too little, too late.”

The conference also comes as officials gave out signs last week that a crackdown on the technology sector that started in late 2020 had resulted in fines for Ant Group and Tencent.

Premier Li Qiang met with companies including Alibaba’s cloud division and Meituan on Wednesday and encouraged them to do more to boost China’s economy as yet another clear indicator that the crackdown is gone.