Chinese technology stocks have fallen more than 10% across the board after President Xi
Jinping tightened his grip over the country’s Communist Party this past weekend.
Tech giants Alibaba (BABA) and Tencent each closed down more than 11% in Asian trading,
while search engine company Baidu (BIDU) fell 12% and food delivery firm Meituan declined
14%.
The steep selloff comes after Xi secured an unprecedented third term as China’s president and
packed the Politburo standing committee, the core of the ruling Communist Party, with loyalists.
Investors see Xi’s strengthened grip on power as bad for China’s technology sector and stocks
in general.
Under Xi’s leadership, China has implemented a number of policies that have tightened
regulations on the technology sector and hurt share prices.
Meanwhile, Xi continues with a strict “zero-Covid” policy that has cities, including the financial
centre of Shanghai, locked down this year.
These two policies have contributed to billions of dollars being wiped of the value of Chinese
stocks, including Tencent and Alibaba, which have reported their slowest growth ever this year.
So far in 2022, Alibaba’s stock has declined 40% to trade at $72.18 U.S. per share. Baidu’s
American listed stock has fallen 39% to $91.23 U.S. per share.
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