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Chinese Cos in USA lose $840b in 3 days after Beijing’s crackdown against its corporate giants

In the span of three trading days, the Nasdaq Golden Dragon China Index – which tracks 98 of China’s biggest firms listed in the U.S. – has plunged about 20% _ its biggest such drop on record.

In this photo provided by the New York Stock Exchange, traders work on the floor, Friday, May 7, 2021. Stocks are rallying to records on Wall Street Friday despite a stunningly disappointing report on the nation's job market, as investors see it helping to keep interest rates low. (Nicole Pereira/New York Stock Exchange via AP)

Some Chinese corporate giants listed at stock exchanges in the United States have lost $840 billion in just three days after Beijing’s regulatory crackdown against its mega companies in China.

In other words, American companies and individual investors having stake in Chinese companies listed at American bourses have suffered massive losses.

The slump in U.S.-listed Chinese shares further accelerated, wrapping up losses, as investors shunned the assets amid a broad-based crackdown by regulators in Beijing.

In the span of three trading days, the Nasdaq Golden Dragon China Index – which tracks 98 of China’s biggest firms listed in the U.S. – has plunged about 20% _ its biggest such drop on record. Stocks included in the index have seen $840 billion, or nearly half their collective value, erased since hitting a record high in February.

The gauge was already under pressure after China unveiled sweeping policy changes to the technology sector but the rout deepened as regulators pivoted to also target other industries like online education and property management.

“We do not see a buy-the-dip opportunity. China’s recent regulatory crackdowns are the beginning, not the end, of increased control and command by Chinese leaders,” said David Trainer, chief executive officer of New Constructs, an investment research firm, based in Nashville, reports

Markets across China slumped on Tuesday as rumors circulated that U.S. funds were dumping Chinese and Hong Kong assets, with analysts warning that gains may be short-lived. Tech-giants including Alibaba Group Holding Ltd., Inc., NIO Inc. and Baidu Inc. were among the biggest decliners in New York, all slumping by at least 3%.

Still, shares of education stocks like TAL Education Group, Gaotu Techedu Inc. and New Oriental Education & Technology Group managed to stage a rebound on Tuesday. All three gained by at least 10%, though they remain lower by an average of 92% on the year. Other companies, including Meten EdtechX Education Group Ltd. and 17 Education & Technology Group Inc. were also higher as of 2:12 p.m. in New York.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.


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