Recently, after Chinese President Xi Jinping secured a third term, there was a sharp decline in the stock market in Hong Kong. Investors became concerned about Xi’s governance strategies, particularly the stringent “zero-COVID” policy leading to prolonged lockdowns, prompting doubts about the future stability of the Chinese economy.
Following this market downturn, 13 of China’s wealthiest individuals suffered significant losses, with each seeing billions of dollars wiped from their net worth. Among the affected were notable figures like Pony Ma, the founder of Tencent, Jack Ma, the founder of Alibaba, and Zhong Shanshan, the chairman of Nongfu Spring. Collectively, these individuals and others experienced a combined loss of around $12.7 billion.
In addition to the COVID-related restrictions, Beijing has been imposing increasingly stringent regulations on the Chinese economy, ostensibly aiming for “common prosperity,” which involves wealthier individuals contributing more to support the less privileged.
China’s richest people lost about $13 billion in just one day due to a market sell-off after President Xi Jinping secured a third term https://t.co/Xe8JzEEatM
— Business Insider (@BusinessInsider) October 25, 2022
According to Yeap Jun Rong, a market strategist at online trading platform IG, investors fear that President Xi’s influence on policy decisions will grow stronger, especially with his supporters forming the new top leadership team. This scenario suggests a continuation of current economic policies, reinforcing China’s strict zero-COVID approach and further progress towards the common prosperity agenda.
Image Source: Bloomberg.com
