Beijing started cracking down on private enterprises and billionaires, with the most notable tech giant and billionaire on the receiving end of this being Alibaba Group Holding Limited’s Jack Ma when Ant Group’s IPO was halted back in late 2020.
Since then, China has been on a bit of a regulatory spree, with the government pushing for “common prosperity,” with President Xi saying in January of last year that China “cannot let an unbridgeable gulf appear between the rich and the poor.”
The whole regulatory campaign really freaked out investors, though, wiping out hundreds of billions of the Chinese stock market. For example, in July of last year when China imposed regulations on tutoring companies ranging from how much profit they could make to raising foreign capital overseas, it prompted a US$1 trillion selloff for Chinese stocks trading in the United States.
Chinese technology shares had their worst two-day drop since July because people were worried that China was about to impose another regulatory crackdown, with traders and investors pointing to a bunch of clues.
Then, there was a post shared a fair bit across China’s WeChat claiming that an anonymous Tencent Holdings Ltd. employee said the company was about to be on the receiving end of a regulatory blow in the near future. But Tencent quickly shut it down and the accunt that started the rumour was suspended.
“Ask me next time, at least that’s more legit. And I’m not afraid of going on record,” responded Zhang Jun, Tencent’s head of public relations.
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