Three of China’s most valuable businesses — Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Meituan — have shed more than $100 billion in the span of three turbulent days. It’s a remarkable reversal from just a week ago, as investors like Charlie Munger spotted bargains among China Tech Inc. after a $1.5 trillion selloff in 2021. Macquarie issued a report this month headlined “peak crackdown.”
Now, investors are frantically attempting to parse a series of events that suggest Beijing is once more preparing to rein in its giant private sector. When Alibaba reports earnings Thursday, its executives will again face questions about Beijing’s intentions for a sector subjected last year to unprecedented regulatory curbs and punishments, after Xi Jinping’s administration launched a “common prosperity” campaign to curb tech-sector excesses and force them to share the wealth.
The bloodletting began Friday, when the top state economic planner demanded Meituan and its peers lower the fees they charge restaurants in pandemic-hit regions. On Monday, a pair of unverified online posts that went viral suggested Tencent — which weathered 2021’s onslaught better than most — was facing a major regulatory crackdown, forcing its public relations chief into an unusually aggressive denial.
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