SHANGHAI – The richest tycoons doing business in China have lost more than US$9 billion (S$12.8 billion) in the market sell-off that followed President Xi Jinping’s tightening grip on the government.
Tencent Holdings founder and chief executive Pony Ma and Mr Zhong Shanshan, chairman and founder of bottled water giant Nongfu Spring and the nation’s wealthiest person, each lost more than US$2 billion on Monday as shares of their companies tumbled after the Communist Party’s leadership reshuffle, according to the Bloomberg Billionaires Index.
Alibaba Group Holding’s Mr Jack Ma, Baidu’s Mr Robin Li and JD.com’s Mr Richard Liu are not included as their firms’ primary listings are in the United States.
Mr Xi’s move to put his closest allies at the top of the leadership ranks is raising concerns that China’s crackdown on wealth and private businesses will continue.
An index tracking the nation’s shares listed in Hong Kong sank more than after any Communist Party Congress since the index’s inception in 1994.
Foreigners sold a record amount of stocks via trading links in the city, while the renminbi weakened to its lowest level since January 2008.
“The slump today reflects the fragile investor sentiment,” said Mr Kenny Wen, head of investment strategy at KGI Asia in Hong Kong. “People are just trying to hold on and look for more implications for the Chinese economy after the reshuffle.”
Even before Monday’s slump, China’s wealthiest people were on track for their worst year in a decade as Mr Xi’s strict Covid-19 policies took a toll on the economy. As at last Friday, there were 76 Chinese billionaires worth US$783 billion among the world’s 500 richest people, compared with 79 tycoons with a US$1.1 trillion net worth at the end of last year, according to Bloomberg’s wealth index.
While Mr Xi’s reappointment for a precedent-breaking third term is not a surprise, his elevation of loyalists is breaking from the collective leadership model that underpinned the nation’s rise, with now fewer voices at the top to question his policies.
The move indicates that the nation is likely to stick with its stringent Covid-19 approach, which has hurt the economy. A slew of data released on Monday after abrupt delays last week showed a mixed recovery, and economists remain wary about future growth. BLOOMBERG
