China shares slump in US as Xi starts 3rd term

by IANS |

Beijing, Oct 25 (IANS) Shares of Chinese firms listed in the US have slumped on concerns that President Xi Jinping will continue with his ideology-driven approach at the cost of economic growth.

Chinese technology giants Alibaba and Baidu fell by over 12 per cent in New York, the BBC reported.

Investors fear the world's second largest economy will be held back by its tough Covid-19 restrictions.

One analyst said Beijing was in a "tug-of-war" between measures to boost growth and its zero-Covid policies.

On Monday, shares in technology giant Alibaba closed 12.5 per cent lower on the New York Stock Exchange, after hitting a 52-week low earlier in the day.

Internet company Baidu lost 12.6 per cent, while e-commerce platform Pinduoduo plunged by almost 25 per cent.

It comes after China's ruling Communist Party wrapped up its twice-a-decade congress on Sunday.

During the week-long event President Xi, who secured a historic third term in charge, offered no timeline for the easing of the country's strict measures to slow the spread of the coronavirus.

The zero Covid policies have seen some of China's biggest cities being put into lockdown, including the financial, manufacturing and shipping hub of Shanghai.

China's economy is facing "policy stimulus and multiple growth headwinds including Covid restrictions, a property market downturn and slowing exports," Minyue Liu from BNP Paribas Asset Management told the BBC.

"We expect the (Chinese) government to face continued domestic pressure on its zero-Covid policy," she said

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