Alibaba, JD.com lead big Chinese tech losses in wake of Xi's new power grip
Leading Chinese tech companies such as Alibaba (NYSE:BABA), JD.com (NASDAQ:JD) and Baidu (NASDAQ:BIDU) saw their shares plunge into the red Monday amid worries that Chinese President Xi Jinping's grip on power will lead to more restrictions on the nation's private business sector.
Over the weekend, the Chinese Communist Party [CCP] gave Xi a third term and party chairman, and Xi named several CCP allies of his to the party's politburo standing committee. Wall Street viewed the moves as consolidating Xi's power, and potentially giving CCP more control and oversight of China's business sector, and tech industry, in particular.
Investors raised concerns about how Beijing could introduce new policies that constrain tech companies' growth, and reduce any efforts that run counter to Xi's administration.
Reaction on Wall Street was brutal, as Alibaba (BABA) dropped 12.5% by the close, while JD.com (JD) slumped by 13% and Baidu (BIDU) fell more than 12% on the day.
Losses were widespread, with Weibo (WB) falling almost 13%, Pinduoduo (PDD) dropping by more than 24%, gaming platform operator NetEase (NTES) falling by almost 10% and Bilibili (BILI) plunging almost 17% as the day got underway.
The KraneShares CSI China Internet ETF (KWEB) was also bruised, and fell more than 14%.
The situation among Chinese tech stocks has been erratic for weeks. Monday's losses added to the matter that has been exacerbated by new U.S. regulations that limit the sale of some semiconductor technologies in China in order to keep those products out of the hands of the Chinese military.