Crackdown on Hong Kong, fear of participating in the genocide of Uyghurs, and empowering the increasingly hostile Chinese military motivates investors to change trade direction. After the big sale of the Beijing-regime-linked real estate assets, the Western investors are unloading Chinese tech shares.
Days after the hundredth anniversary of the formation of the Chinese Communist Party, its First Secretary Xi Jinping launched a campaign for empowering small and medium businesses. It soon turned out that the Chinese must read the party newspeak in the reverse direction or opposite meaning.
The historic shrinkage of what was called small and medium business but was a concealed operation of the Chinese Communist Party is the consequence of Mr. Xi's policies. Because it was neither small or medium but gigantic tech firms with exposure to the international venture capital including, illegally, to the financial institutions, like World Bank, support programs. Chinese Communist Party used it as a cover for its operations that contradicted and were hostile to the interest of the investors.
Beijing could not accepts Western transparency standards
Due to the former US President Trump policies of enforcement on Chinese firms the equal transparency standards that oblige Western firms, Beijing decided to conceal its actions even more. It led to conflicts.
Investors lost trust after firms would deny basic accounting information and the exodus started. That selloff in Chinese technology stocks accelerated on Wednesday, as investors unnerved by China’s widening crackdown on Internet companies and other industries sold down their holdings of many popular stocks.
The Hang Seng Tech Index in Hong Kong, which includes stocks such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd., tumbled 8 per cent, registering its third day of declines. The city’s flagship Hang Seng Index dropped 4.2 per cent.
Among big individual stocks, online gaming and social-media company Tencent fell 9 per cent. The selloff pushed Tencent’s market value down to about $544 billion, according to FactSet— meaning it has lost about $390 billion of market capitalization since peaking in mid-February. Hong Kong-listed shares in Alibaba, China’s biggest e-commerce company, also lost ground, falling 6.4 per cent.
Many Western investors learned hard lesson after Chinese Communist achieved control over the Hong Stock Exchange ending the city's free market era.
Chinese Communist Party tries to conceal its ownership of Chinese tech firms
The so-called regulatory changes are designed to conceal real owners and operators of the capital and to preserve their full control. It is not hard to figure out that the every profitable firm is owned by top Chinese Communist Party dignitaries. It is secret that must not be unveiled first of all before Chinese people, said long-term Chinese tech firms analysts who also have in-depth understanding of Chinese Communist Party operations, Dr. Wang Zu Yu in an interview with The Owner.
Given the high volatility, risk managers might be telling some portfolio managers to reduce their holdings, even if the investors would prefer to seek out bargains.
Among other major online companies, food-delivery company Meituan retreated 18 per cent. A day earlier, Chinese regulators had issued guidelines on how companies such as Meituan should treat delivery drivers.
Understandably, Chinese managers tried to save what left claiming the trend was for a technical upgrade and the situation would change in early August.