Shares of US-listed China-based companies rocked on Monday, as moves to consolidate power by Chinese President Xi Jinping raised concerns that current policies has led to economic slowdown growth will continue.
Over the weekend, Chinese leader Xi was appointed to a third, five-year term as general secretary, ignoring the custom of resigning after two terms. as reported by the Associated Press. Xi also gave up Prime Minister No. 2 Li Keqianga proponent of market-style reform and private enterprise, from a seven-member Standing Committee that supports Xi’s stronger allies.
That leaves investors reeling as the economy slows, amid concerns about the current zero-COVID policy that led to the lockdown and uncertainty about whether suppression of technology companies will continue.
China Large Cap Exchange Fund iShares
FXI,
fell 8.8% in pre-market trading, putting them on track to open at the lowest prices seen during regular trading hours since November 2008.
That followed a 6.4% drop in Hong Kong’s Hang Seng
HSI,
arrive lowest level in 13 yearswhile Shanghai Composite
SHCOMP,
down 2.0%.
Additionally, while data showed China’s economy grew more than expected in the third quarter, year-to-date growth rate still much lower than the annual growth target. “The [growth] Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the gap is due to China’s impossible COVID-zero mission, which has been confirmed and reinforced with Mr. Xi’s third term.
Among the China-based companies doing business in the US more actively, shares of electric vehicle maker Nio Inc.
NIO,
down 11.9% before the open, aiming for the first trade below $10 since July 2020.
Among other electric vehicle manufacturers, shares of XPeng Inc.
XPEV,
fell 12.4% to a record low, and Li Auto Inc.
LI,
lost 9.9% to a two-year low.
Shares of e-commerce giant Alibaba Group Holding Ltd.
TORTOISE,
down 11.8% to the lowest price since February 2016.
Elsewhere, share by JD.com
JD,
down 15.7%, Pinduoduo Inc.
PDD,
contributing 14.9%, iQiyi Inc.
INTELLIGENCE QUOTIENT,
lost 10.3%, Bilibili Inc.
BILI,
down 16.8% and Baidu Inc.
BIDU,
slip 12.0%.
