The tech giants in China have already lost nearly $ 260 billion in market value in the past two days, after Beijing moved forward with legislation to limit the growing power of these listed companies.
Alibaba, Tencent, JD.com, Meituan and Xiaomi all slide up to 8%, after sinking in the previous session. Alibaba lost 9.80% to HKD 248.40 (HKD), JD.com yielded 5.63% to US $ 80.08 in the United States and 9.20% to HKD 300 in China, Meituan fell 9.67% to 271 Hong Kong dollars and Xiaomi lost 8.18% to 22.45 HKD.
This Tuesday, the Chinese government unveiled legislation that aims to combat monopolistic practices in the internet industry, after years without intervening in the sector. The new rules aim to avoid anti-competitive practices, such as collusion to share sensitive consumer data, alliances that stifle smaller rivals or subsidize services, making them available below cost, until eliminating competition.
Regulators will be concerned with the reach of these companies, which already operate in more sensitive sectors such as finance and health. “The great Chinese technology companies will have to rethink their business models, says Anjie Law Firm.” The philosophy of internet companies is that the winner wins everything, and in particular in platform operators, who gather similar traffic and build ecosystems similar to each other, “the same company continues, speaking to Bloomberg.
The forecast of the investment house Chanson & Co is that these measures may discourage companies in the sector from quoting on the Chinese market. In the previous week, the same executive had interfered with the plans of a major representative of the sector, Ant Group, which was preparing to go public, with an issue of 35 billion dollars. According to a statement quoted by Bloomberg, the Shanghai stock exchange suspended the group’s entry due to regulatory issues. China argues that this company, by tycoon Jack Ma, will be subject to the same capital and leverage restrictions as banks.
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