Stock prices of Chinese companies are plummeting again as regulatory risks for Chinese authorities‘ Big Tech have been re-emerged. The China regulatory risk is expected to continue for the time being, raising concerns among investors.
On the New York Stock Exchange (NYSE) on the 17th (local time), the Nasdaq Golden Dragon China Index (HXC) plunged 2.38 percent from the previous day. The index follows 98 Chinese companies listed in the U.S. On the same day, Chinese Internet company Tencent’s Tencent Music fell 12.3 percent, while Alibaba, Baidu and Jingdong fell 4.9 percent, 2.8 percent, and 3.6 percent, respectively.
Earlier in the day, the Chinese stock market also plunged. The Shanghai Composite Index fell 2.0 percent and the Shenzhen Composite Index fell 2.09 percent on Wednesday.
Concerns have grown that the economic recovery will be dampened as China’s industrial production and retail sales indicators, which were announced on the 16th, fell low in July. Then, when the Chinese government announced on the 17th that it had newly established regulations on the prevention of Internet irregularities, “regulatory risks” rose again.
In addition, pressure from the U.S. authorities is weighing on the market. Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), warned, “Many investors in the U.S. are not familiar with Chinese companies. The Chinese government’s political and sudden regulations could change the investment environment rapidly.”