Chinese officials stepped in on several fronts to rein in potential risks to Communist Party rule, touching everything from tech firms to bond markets to political dissent in Hong Kong.
Investors ripped off the markets as investors to justify the changes emanating from Beijing’s opaque corridors. They arrived soon after the Ant-Group Company’s record-breaking shock suspension $ 35 billion initial public offering.
Here’s a quick roundup of the latest happenings:
China’s state administration for market regulation is a sleepy government bureaucracy essentially unknown outside the country. But on Tuesday morning, SAMR dropped 22 pages of dense regulatory proposals that wiped out $ 290 billion in market value and signaled the country’s most comprehensive overhaul of the country’s technology industry since the founding of the People’s Republic six decades ago .
Regulators set its monopoly Alibaba Group Holding Limited and Tencent Holdings Limited, which are among the most valuable companies in the world. The new rules may prevent them from acquiring promising startups and force them to sell bets to other companies.
Meanwhile, China’s top banking watchdog doubled down on its bash to rein in financial technology companies like Ant, saying they should be subject to supervision and risk management, just like banks. Analysts predict that new regulations may reduce the value of fintech giants $ 140 billion. State supported lenders such as China Merchant Bank Company – popularly known as the retail bank king – is emerging as the largest Winners.
The onshore default of a state-owned coal mine in central Henan province surprised the market earlier this week due to fresh concerns over the level of state-linked firms with implicit support, which Beijing could hope for risk Beijing will step towards introducing a market-led approach.
Uncertainty over credit tensions rising through the market to fuel the sell-off in bonds of other state-owned enterprises and local government financing vehicles that pervade financial stocks. At least six Chinese banks cut their stake in corporate bonds, and coal companies also canceled the sale of loans or delayed the pricing of their notes as investors sourced the sector.
All have been wiped out by the possibility of a possible credit crisis in a high-profile firm with unclear ties to the state. The commercial branch of a top university in China saw some of its dollar bonds sinking to about $ 26 cents, as investors feared Tsinghua Unigroup Company will struggle to pay its imminent mature debt.
China passed a resolution this week that deemed any Hong Kong lawmakers insufficiently loyal to be disqualified from the city’s legislature, prompting opposition politicians to resign en masse. The move effectively stalled opposition in the most democratic body under Beijing’s rule, one of China’s strongest actions reducing the region’s autonomy.
US President Donald Trump’s administration condemned the move and vowed to approve Chinese and Hong Kong officials overseeing the area. By the middle of December, it is to be decided whether to ban any transaction with those persons.
Trump too Accelerating shares of top companies – including China Mobile Limited and China Telecom Corp Ltd – to sign an order banning US investments owned or controlled by Chinese companies. The Chinese Foreign Ministry on Friday accused the US of “blatantly condemning” its military-civilian integration policies, while ultimately Congratulations to Joe Biden on his election victory.
– assisted by Candice Zacrias and Peter Alstrom