Chinese tech stocks suffer worst sell-off since global financial crisis as Beijing pledges to step up screening of US-listed firms
The Nasdaq Golden Dragon China Index – which follows US-listed Chinese tech – tumbled 22% in July, marking the biggest one-month drop since the financial crisis. Meanwhile, Hong Kong’s Hang Seng plunged 1.35%, for a monthly loss of 9.9%, with the Shanghai Composite also falling, by 0.4%, bringing the July decline to 5.4%.Also on rt.com Is Beijing’s crackdown on Big Tech about making the lives of Chinese people better? RT’s Boom Bust investigates
The abrupt declines in Asian stocks have reportedly wiped out over $730 billion in value from the Golden Dragon gauge, with $354 billion of that occurring in June alone. Last month, the index, which had hit a record in February, was up 25% in the 12 month-period until end of June.
The downward spiral came as China’s regulators target companies across such sectors as tech, finance, education, and healthcare, intensifying scrutiny that mostly focused on shares of the US-listed tech firms over the past month.
Shares of New Oriental Education Education & Technology and TAL Education have taken the hardest hit, dropping over 70% in July. The heavy losses came after Chinese regulators barred the companies concerned with teaching school subjects from raising capital, going public and making profits. Shares of Alibaba and Baidu were also down, by 14% and 20%, respectively.
At the same time, the country’s transport ministry pledged to ramp up supervision over ride-hailing and on-demand trucking firms. The news dragged down the shares of Didi Global and Full Truck Alliance, both of which held initial public offerings in the US last month. The companies are currently the subject of a different probe, by China’s Cybersecurity Administration, over data-security concerns.
Earlier this week, the WSJ cited one of China’s top regulators as stating that the country was not planning to decouple from capital markets, and that the government would assess market impacts before introducing future policies.
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