Washington/Beijing: – Stocks of Chinese companies fell to record lows in the US stock markets. The decline continued for three consecutive days on Friday, Monday and Tuesday, with Chinese companies claiming more than 200 billion dollars in losses. The decline for Chinese companies appears to be the biggest jolt since 2008. These companies include companies in the Chinese information technology and education sectors. The main reason for the fall in the US stock market is said to be the actions initiated by the ruling communist regime in China.
About 250 companies, including eight Chinese state-owned companies, have so far been listed on the US stock exchange. The purpose behind this registration is believed to be to raise a large number of funds on the international level, including the United States. Chinese companies have so far managed to raise nearly USD 2 trillion through such registrations. Although Chinese companies are raising large sums of money from US stock exchanges, the number of actions taken by the US administration against them also has increased in the last few years. The Trump administration has blacklisted many Chinese companies and had also imposed various sanctions. The Biden administration has also indicated that action sessions against Chinese companies will continue.
Against this backdrop, the Chinese ruling regime began to pressurise its companies to withdraw from the US stock market. China has started cracking down on big IT companies. In the last few months, China has dealt a major blow to international investors, including the technology sector, by taking action against companies such as Alibaba, DiDi and Tencent. The repercussions of this shock are being felt in the stock market.
Over the past few months, investors have started selling stocks of Chinese companies in the US stock market. The move has gained momentum since last week, with stocks of Chinese technology companies falling since Friday. The NASDAQ Golden Dragon China Index in the United States lists the top 100 Chinese companies. The index has been falling for three consecutive days on Friday, Monday and Tuesday. More than 20 per cent fall was reported in three days. The fall has also been felt in the Chinese stock market in Hong Kong, and shares of Chinese companies have fallen sharply there too.
In just three days, Chinese companies are said to have lost more than USD 200 billion. According to media and analysts, the value of Chinese companies has fallen by nearly a trillion dollars since the decline in February. The reduction in the last three days is the biggest since 2008. Leading companies include Alibaba, DiDi, Tencent, Meituan, JD.com and Baidu. Against the backdrop of the decline, US analysts have advised US investors to be cautious when investing in Chinese companies soon.
Only a few days ago, it was reported that the Chinese ruling regime had launched a crackdown on leading Chinese companies to stop them from registering stock in the US stock market for capital. This was said to attract more and more foreign investors to China, jolting the US investment sector. Against this backdrop, the record fall in shares of Chinese companies over the past three days is striking.