Xi Jinping: Alibaba and JD.com are falling in the US as Xi claims full control of China
KraneShares CSI China Internet Fund, an exchange-traded fund that includes more than 40 Chinese stocks, fell 13%. Of the main Chinese Internet promotions Alibaba Group Holding Ltd. to JD.com Inc. there was a double-digit decrease. in Johannesburg, Tencent Holdings The largest shareholder of Naspers Ltd. fell by 12%.
Monday’s sale came after Xi packed Standing Committee of the Politburo with six loyalists during a bi-ten-year reshuffle of the party leadership, with an unprecedented play of power demonstrating his undivided control over the country’s highest decision-making body.
Such dominance, however, fuels fears that China may refrain from fully reopening its economy for longer, as there will be fewer voices at the apex of power questioning Xi’s Covid Zero policies. Investors are also concerned that the ruling party may stick to its hardline approach to domestic private enterprises and technology entrepreneurs while ratcheting up military pressure on Taiwan.
“The danger is that absolute power can lead to tough politics both locally and internationally,” said Sharif Farha, head of investment at HB Investments. “At the local level, a zero covid policy or tighter regulations on Chinese technology may not go away. Internationally, the market is definitely concerned about political tensions.”
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Today’s decline in US-listed stocks follows a sharp drop in Hong Kong-listed stocks, sending the Hang Seng Index to its lowest level since 2009. The CSI 300 fell nearly 3% as foreign investors sold a record $2.5 billion. shares in the mainland through exchange links in Hong Kong. Meanwhile, the offshore yuan fell to its weakest level against the dollar on record.
Elsewhere, a slew of belated economic data showed a mixed recovery in China in the third quarter, with rising unemployment and lower retail sales in September despite picking up growth. The weak real estate sector – a key risk factor affecting investor sentiment towards Chinese equities – contracted in the fifth quarter, extending the longest slump in history.