Markets react to Xi’s consolidation
Islam News – Investors unnerved by Xi Jinping’s power grab — and the state-heavy agenda of China’s top leader — sent Chinese shares tumbling yesterday.
In Hong Kong, share prices plummeted more than 6 percent, reaching 13-year lows as traders dumped huge numbers of shares. In mainland China, markets fell nearly 3 percent, even though Beijing puts heavy pressure on institutional investors not to sell during politically fraught moments. And the renminbi dropped to a 14-year low against the dollar.
The heavy selling was particularly striking given that the Chinese government said the economy grew 3.9 percent in the three months that ended in September, from the same period a year earlier. The data, released yesterday, was stronger than expected but still fell short of Beijing’s target of 5.5 percent for this year.
Analysis: Xi has put a premium on politics and security — and a stringent “zero Covid” policy — even at the cost of slowing economic growth and employment.
Details: The nosedive in financial markets was particularly focused on the shares of Chinese internet companies, which have been a key target of Xi’s campaign to strengthen the Communist Party’s economic control.
Background: During last week’s Communist Party congress, Xi pushed out longtime economic policymakers like Premier Li Keqiang and Wang Yang, an architect of the free-market economic boom in southeastern China.
Source: The New York Times