Chinese President Xi Jinping’s vindictive campaign against Alibaba founder Jack Ma is now hurting the Chinese stock market. China’s State Administration for Market Regulation has gone as far as launching an anti-trust probe into Alibaba. Meanwhile, Chinese authorities have also sought to target Ant, an Alibaba-affiliate. Chinese authorities said that they want to supervise the fintech company on issues like market-oriented behaviour and consumer interests.
Xi Jinping’s latest blitz against China’s leading tech giant Alibaba comes amidst a crackdown on tech giants by the Chinese Communist Party (CCP). Anyhow, Xi Jinping’s crackdown against Jack Ma’s Alibaba has crashed the Chinese stock markets, even though Asian markets remain upbeat.
The Chinese President has made an issue out of Alibaba’s “choose one of two” policy that requires the tech firm’s business partners to avoid dealing with competitors. Chinese authorities are looking to investigate into mala fide allegations of the Alibaba policy being monopolistic.
Earlier, China’s State Administration for Market Regulation (SAMR) had also summoned other tech giants in the Communist nation like JD.com, Pinduoduo, Tencent, food delivery firm Meituan and ride-sharing company Didi Chuxing. SAMR had held discussions about the potential consequences of community group buying.
Such regulatory witch-hunt by the Xi Jinping administration has created a sense of insecurity in the Chinese economy and businesses, especially in the tech sector. So, it doesn’t come as a surprise that stocks fell in Shanghai on Thursday after the market regulator launched an anti-monopoly probe against Alibaba.
The Shanghai Composite index SHCOMP registered a net loss of 0.2 per cent. Shares also crashed on the smaller market of Southern China’s Shenzhen 399106.
And to be precise, only the Chinese markets tumbled on Christmas Eve. Other Asia-Pacific markets performed remarkably well- Tokyo’s Nikkei 225 index NIK gained 0.4%, South Korea’s Kospi 180721 jumped 1.3% and Australia’s S&P/ASX 200 XJO too rose by 0.4%. Stocks also went up in Taiwan Y9999 and Singapore STI.
So, Xi Jinping has ruined the sentiment in Chinese stock markets even though the Asian trend is generally positive and upbeat. Xi’s fragile ego and megalomania have started hurting every sphere of the Chinese economy.
The Chinese President has been going after the Chinese tech majors ever since Ma criticised Xi’s market regulation policies. The Alibaba founder had said, “Chinese finance basically does not carry risk; rather, the risk comes from lacking a system. Good innovation is not afraid of regulation but is afraid of outdated regulation. We shouldn’t use the way to manage a train station to regulate an airport.”
Ma’s remarks have led to the SAMR cracking down on internet companies over groundless allegations of monopolistic practices. Xi Jinping’s tensions against Jack Ma has now, however, escalated into a full-fledged war and the Chinese markets could be the ones sustaining painful collateral damage.
