CNBC: China’s tech giants have lost more than $280 billion in market value as regulatory concerns mount
Shares of China’s top technology giants were battered on Wednesday as regulatory concerns continue to mount.Many in the U.S. focused on the good: reigning in tech giants. In the U.S., Silicon Valley plays the role of the CCP. BigTech does the censorship, deplatforming and social credit. If China can hobble their tech giants, America can too goes this line of thinking.By the Wednesday market close in Hong Kong shares of Alibaba listed in the city plunged 9.8% while Tencent dropped 7.39%. Smartphone maker Xiaomi also declined 8.18% and China’s biggest on-demand delivery services firm Meituan fell 9.67%. E-commerce giant JD.com also saw its stocks plummet 9.2%.
The broader Hang Seng Tech index was also hammered and fell 6.23% on the day to 7,465.44.
The combined losses of the five tech heavyweights since their Monday’s close has contributed to more than $280 billion being wiped off in terms of market cap at the close of the trading day in Hong Kong, based on CNBC’s calculations.
Chinese regulator — the State Administration for Market Regulation — on Tuesday announced a set of draft rules aimed at curbing monopolistic behavior on internet platforms.
For investors, the takeaway is the companies in China are not going to be run for the benefit of shareholders. At some point, the CCP will either strike from without (regulations) or within (turning the company into a hybrid of private and SOE) when the company grows too large or starts eating into SOE profits. As for geopolitics, debates over whether companies such as Huawei are tied to the government are easily solved. In the long-run, all Chinese companies will serve the CCP.
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