Chinese shares fall in US market as Xi Jinping’s third term begins
Shares of Chinese companies listed on the U.S. stock market have fallen on fears that President Xi Jinping will continue his ideological policies at the expense of economic growth.
Shares of Chinese technology giants Alibaba and Baidu fell more than 12 percent in New York trading.
Investors fear that the world’s second-largest economy could slow its growth due to its strict coronavirus restrictions.
An analyst said there was a “power crunch” between Beijing’s growth-promoting measures and its zero-covid policies.
Shares of technology giant Alibaba closed down 12.5 percent on the New York Stock Exchange on Monday, having hit a 52-week low earlier in the day.
Internet giant Baidu lost 12.6 percent, while e-commerce platform Pinduoduo’s share price fell nearly 25 percent.
The drop in share prices of Chinese companies came after China’s ruling Communist Party concluded its second congress in a decade on Sunday.
During the week-long meeting, President Xi Jinping assumed the presidency for a third term, a history in its own right. He did not offer a timeline for easing the country’s strict measures to slow the spread of the coronavirus.
Some of China’s major cities, including the financial, manufacturing and shipping hub of Shanghai, are facing pressure to impose lockdowns on zero-covid policies.
Manu Liu from BNP Paribas Asset Management told the BBC that China’s economy faces ‘policy stimulus and a range of growth challenges, including Covid restrictions, a slowdown in the property market and a slowdown in exports. Lack’ are included.
“We expect the (Chinese) government to face continued internal pressure on its zero-covid policy,” he said.
Although official data published on Monday showed the economy grew at a better-than-expected rate between July and September, Erin Xin, Greater China economist at British bank HBSC, said in a note to investors. However, “there are still signs of stress as consumption remains weak due to the resurgence of the ongoing Covid-19 pandemic and the weakness of the property market”.
“With a lack of clarity, people are assuming that the direction we’ve seen is going to be stronger,” Trinh Nguyen, senior economist at Natixis, told the BBC. This is what led to the sell-off in shares and rising expectations of the Chinese economy going forward.
Stock markets in Hong Kong and mainland China were slightly lower on Tuesday after the previous day’s declines.
Hong Kong’s benchmark Hang Seng index fell more than 6 percent on Monday, while the Shanghai Composite fell 2 percent.
