After protestors organized a campaign against the ruling Chinese Communist Party last weekend, China's technology stocks soared. Alibaba (BABA) already formed an uptrend to rise by 39% in the month. Futu Holdings (FUTU), an online brokerage in Hong Kong, doubled its share price in barely a month. Pinduoduo (PDD), which sells farm equipment online, doubled its share price, too.
In the China electric vehicle segment, XPeng (XPEV), whose shares collapsed from a $35 peak in June, bottomed in the single digits. XPEV stock rose by 62% last week alone.
Will the aforementioned stocks keep rising?
The relief rally depended on months of repression on the share value. The Chinese people voiced their discontent with repression around the brutal Zero Covid policy. After the protest, the government relaxed a few policies. Slowly but surely, it will ease each Zero Covid measure.
China must re-ignite its economy while minimizing infections. Though the Omicron variant is less dangerous, China’s older population is not vaccinated. Still, the domestic vaccine is not effective. China may need to consider foreign vaccines to protect its people. As vaccinations increase, they will allow people to resume their economic activities.
The country cannot lose its title as the world’s manufacturing giant. Doing so destabilizes the population. The ruling party does not want civil unrest returning anytime soon.
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