Panic selling hits China and Hong Kong, with concerns about economic future
Stocks in Hong Kong and Shanghai closed out Monday's session down 6.3% and 2%, respectively, amid a slew of concerns over the country's economy. While third-quarter GDP growth beat expectations at 3.9%, the figure was way below China's official full-year target of 5.5%, which is already its lowest goal in three decades. A large-scale property crisis and strict zero-COVID strategy have weighed on consumer spending, and there are additional economic fears as President Xi Jinping tightens his grip on power.
Quote: "This is panic selling," said Dickie Wong, executive director of research at Kingston Securities. "Quite obviously investors are simply not confident about the future of the Chinese economy."
During China's 20th Party Congress, Xi was awarded with a third five-year term as leader of the ruling Communist Party, while the new Politburo Standing Committee was stacked with allies, loyalists and protégés. Xi also reaffirmed his Common Prosperity drive by pledging to "standardize wealth accumulation mechanisms" and promoting "Chinese-style modernization." Meanwhile, the Communist Party's constitution was amended with strengthening "fighting spirit and ability," while proposing and deterring separatists seeking independence in Taiwan.
Commentary: "Foreign investors and businesses have desperately searched for signs that liberals or 'reformers' will play a role in shaping the economy or bringing back an old economic order that prioritized foreign investment and liberalization of the economy," said Drew Thompson, a visiting senior research fellow at the National University of Singapore. "It is clear from the outcome of the 20th Party Congress that national security and the party's political security will take precedence over economic growth."
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