Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 42

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 42
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 of the countries in other jurisdictions in many respects, including with respect to the amount of government
involvement, level of development, growth rate, control of foreign exchange and allocation of resources. The PRC government exercises
significant control over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations,
setting monetary policy, regulating financial services and institutions, providing preferential treatment to particular industries or
companies, or imposing industry-wide policies on certain industries. Economic reform measures may also be adjusted, modified or applied
inconsistently from industry to industry or across different regions of the country, and there can be no assurance that the Chinese government
will continue to pursue a policy of economic reform or that the direction of reform will continue to be market friendly.

While the Chinese economy has experienced significant
growth in the past four decades, growth has been uneven, both geographically and among various sectors of the economy. Various measures
implemented by the PRC government to encourage economic growth and guide the allocation of resources may benefit the overall Chinese
economy, but may also have a negative effect on us. Our results of operations and financial condition could be materially and adversely
affected by government control over capital investments, foreign investment or changes in applicable tax regulations. Any severe or prolonged
slowdown in the rate of growth of the Chinese economy may adversely affect our business and results of operations, leading to reduction
in demand for our products and adversely affect our competitive position. Additionally, the PRC government may promulgate laws, regulations
or policies that seek to impose stricter scrutiny over, or completely revise, the current regulatory regime in certain industries or
in certain activities. Furthermore, the PRC government has also indicated an intent to exert more oversight and control over overseas
securities offerings and foreign investments in China-based companies. Any such actions may adversely affect our operations, and significantly
limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of our securities to significantly
decline or be worthless.

Our ability to successfully maintain or grow
business operations in China depends on various factors, which are beyond our control. These factors include, among others, macro-economic
and other market conditions, political stability, social conditions, measures to control inflation or deflation, changes in the rate
or method of taxation, changes in laws, regulations and administrative directives or their interpretation, and changes in industry policies.
If we fail to take timely and appropriate measures to adapt to any of the changes or challenges, our