Action on the side of the Chinese financial authorities: after a black week for technology stocks, the state media wanted to be reassuring. Despite months of an aggressive campaign to regulate the sector, the official daily of the Stock Exchange, the Securities Daily, on July 28 called on investors to “ don’t be too pessimistic ”. “ This decrease is a structural adjustment. It is unlikely that it will continue ”, he estimated. the Securities Times, another leading economic newspaper, minimizes the situation: this decline would only be“A bad interpretation of the policy” from Beijing. The various Chinese regulators, who have multiplied investigations, fines and reminders to order over the past eight months, have they been too vehement?
This summer, the attacks have multiplied. After a cybersecurity investigation launched against Didi in the aftermath of the Chinese leader’s taxi ordering IPO, authorities forced private education companies into non-profit entities. With each announcement, the prices of the targeted companies fell and billions evaporated. Scared, investors are reluctant to buy Chinese tech.
Between July 22 and July 27, Alibaba sold 13% to Wall Street, and Tencent 15% to Hong Kong. Meituan, a heavyweight in services and deliveries, plummeted 26% on the same dates, hampered by new directives that require meal delivery companies to guarantee their employees a salary above the legal minimum and reasonable rates. In total, 1.5 trillion dollars (1.264 billion euros) went up in smoke, Bloomberg calculated. Tuesday, August 3, is the editorial of a state media describing video games as“Spiritual opium” which worried: Tencent, world number one in the sector, lost another 8%, and Netease, number two in China, 15%.
To the surprise of investors, accustomed to the country putting economic growth above all else, Beijing has decided to favor parents of students, delivery men or small firms exhausted by platforms. In times of tension with the United States, national security and social stability represent absolute priorities: it is a question of preventing the exit of data from the territory, of limiting the control of Chinese assets by foreigners and of promoting national technological self-sufficiency. To achieve its ends, Communist China, which disregards property rights, has not hesitated to sacrifice the interests of tech giants and investors.
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