Three reasons Everyone is afraid to invest in China

According to Forbes, Chinese stocks are getting hammered in the stock market and for very good reasons:

Shares of Chinese heavyweights trading in the United States plunged Monday amid growing concerns over Beijing’s ties to Russia and potential delistings, piling on to losses of more than $1.1 trillion since regulatory concerns during the pandemic started battering the formerly high-flying Chinese stock market.

Shares of e-commerce juggernaut Alibaba, the largest Chinese company listed in the U.S., were among the hardest hit on Monday, falling 10% on the New York Stock Exchange to the lowest level in nearly six years and pushing losses to $613 billion since an all-time high price in October 2020.

Fellow online retailers JD.com and Pinduoduo posted similarly staggering declines, plunging 11% and 21%, respectively, intensifying declines that have wiped out nearly $289 billion in market value since the firms’ all-time highs last February.

Chinese stocks have “had a rough patch” over the past year amid the nation’s strengthening regulatory campaign against technology companies and, more recently, concerns firms could face removal from U.S. exchanges for potential ties to foreign governments, Oanda analyst Ed Moya said in a Monday email.

On Tuesday, the Securities and Exchange Commission identified five Chinese companies, including fast-food giant Yum China and biotech firm BeiGene, using foreign accounting firms and warned they must hand over audit records or face removal from U.S. exchanges; since then, Yum and BeiGene stocks have plunged nearly 30% apiece.

source