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Tech giants in China have already lost nearly $ 260 billion in market value in the past two days, after Beijing moved forward with legislation to limit the growing power of these publicly traded companies.
Alibaba, Tencent, JD.com, Meituan and Xiaomi slide as much as 8%, after plunging in the previous session. Alibaba lost 9.80% to HKD 248.40 (HKD), JD.com lost 5.63% to US $ 80.08 in the United States and 9.20% to HKD 300 in China. Meituan fell 9.67% to 271 Hong Kong dollars and Xiaomi lost 8.18% to 22.45 HKD.
On Tuesday, the Chinese government released legislation that aims to combat monopolistic practices in the internet industry, after years without intervening in the sector. The new rules aim to avoid anti-competitive practices, such as collusion to share sensitive consumer data, alliances that stifle smaller rivals or subsidize services, making them available below cost, until competition is eliminated.
Regulators will be concerned about the reach of these companies, which already operate in more sensitive sectors such as finance and healthcare. “Big Chinese tech companies will have to rethink their business models, says Anjie Law Firm.” The philosophy of Internet companies is that the winner wins everything, and in particular platform operators, who accumulate similar traffic and build similar ecosystems to each other, “the same company continues, speaking to Bloomberg.
The forecast of the investment house Chanson & Co is that these measures may dissuade companies in the sector from listing on the Chinese market. In the previous week, the same executive had interfered with the plans of a major industry representative, Ant Group, which was preparing to go public with a $ 35 billion issue. According to a statement quoted by Bloomberg, the Shanghai Stock Exchange suspended the group’s entry due to regulatory problems. China argues that this company, owned by tycoon Jack Ma, will be subject to the same capital and leverage restrictions as banks.
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