Chinese tech giants may have been receiving a fortune however at the cost of shrinking small businesses
The government efforts toward such a pursuit have been witnessing a rising interest over the past 12 months
The Chinese investors were caught completely off guard when the Beijing government instated actions against some of the biggest home tech giants, and stated some remarks over overseas-listed shares. One of the biggest surprise elements was a mandate conducted in late July stating that Chinese education businesses are in need of a removal investment and restructuring from foreigners. An order instated earlier in July called out the app stores for removal of a Chinese ride-hailing app Didi, after the company made a major hit in its IPO in New York. Didi shares have been dropping rapidly ever since those orders were placed registering a fall of about 30%. The KraneShares CSI, which has its top holdings comprising of U.S.-listed stocks for JD.com and Alibaba, recorded a fall of 29% over the last 60 days.
It becomes important for the overseas investors to consider the changes in philosophical thinking of these economic policy. A professor from Shanghai Advanced Institute of Finance stated that the Chinese Communist Party’s pledge for delivering prosperity for the common good and balanced wealth for all, comes in contrast with the country’s rising income inequality. The government efforts toward such a pursuit have been witnessing a rising interest over the past 12 months. The Chinese government has been able to protect Alibaba from foreign competition for many years, only until the company that registered substantial growth under Jack Ma that the authorities stated suspension of its affiliate Ant Group’s IPO back in November and instated a fine of USD 2.82 billion over Alibaba back in April. The rising resentment toward tech companies has also been witnessing a sharp increase in China, especially from small businesses that are undergoing the most squeezing at the time due to the digital monsters. It may be true that the internet provides more opportunities for growth; However, it adds additional financial burdens as well.
