Originally published August 2021.
Virtually the entire Chinese economy, especially sectors with heavy investment inflows, such as technology, social media and private education, is in a state of flux. Foreign investors are pulling their positions, Chinese CEOs are under strict scrutiny and stocks are in a free fall as Chinese regulators continue to unleash a regulatory tide fuelled by both politics and a genuine desire to alter the economy. CNBCreported on July 25, 2021, that: “The Hang Seng index in Hong Kong fell 4.13% to close at 26,192.32, leading losses in the region.
At the time of this writing (30 July 2021), Chinese stocks continue to fall with Alibaba, China’s equivalent to Amazon, down 4.35% over the past five days. The turmoil is likely to continue as hysteria over the stock selloff mounts amid real concerns regarding further regulation alongside speculative rumours. Yahoo Finance notes: “A deepening selloff in Chinese stocks spread to the bond and currency markets on Tuesday as unverified rumours swirled that US funds are offloading China and Hong Kong assets.”
The rumours were inspired by speculation of a potential US investment restriction on China and Hong Kong, alongside broader selloffs from investors across Asia who are weary of the CCP’s regulatory onslaught. Based on the ferocity of new regulation, which has recently targeted private education alongside previous victims, such as big tech, the trend seems to be exacerbating, not relenting.