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Wipeout: China stocks in US suffer biggest 2-day loss since 2008

letsrock

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Then why did China go after those companies?
Chinese govt went after them. Its not the loss of chinese govt. They may not be really wrong. China is trying to formalize its economy and bringing these huge companies to task in matters of privacy and anti-competitiveness. But world is cagey whether china is capable of consistent applying rule of law fairly.
 

ARMalik

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Looks like a lot of ignorant comments coming from people who don't understand why China is doing this. Basically, these are Western Investors who are using VIEs in Cayman Island to defraud Chinese government and its people by not paying any taxes, and also jacking up the cost of education for ordinary Chinese people, and by doing this also want to portray and manipulate that studying overseas such as in US/UK/Australia would be cheaper than in China. These investors are pathetic blood sucking leeches, and the Chinese Government has cracked down on them and stopped them robbing its people. I hope the Chinese government cracks down on other sectors as well. GOOD ON CHINA !


Why Beijing’s latest crackdown should worry foreign investors
China is going after holding companies, usually based in tax havens such as the Cayman Islands, that are designed to get around strict rules on foreign investors in key sectors, including education.


Hong Kong/Beijing/New York/London | The value of Chinese shares on Wall Street has soared from just a few billion dollars to $US2 trillion ($2.7 trillion) over the past two decades as investors turned a blind eye to the precarious legal structure underpinning many of the country’s biggest US listings.

However, a crackdown by Beijing on China’s $US100 billion tutoring industry over the past week has included a ban on companies using this structure, known as the variable interest entity, raising the spectre of a broader disaster for some of the world’s biggest investors.


The move has wiped tens of billions of dollars off the market value of New York-listed Chinese companies on fears that the ban on tutoring VIEs could extend to other sectors.

The ban and an ambiguous warning that existing education VIEs will be “rectified” have triggered fears that other VIEs could be hit, such as Alibaba, Pinduoduo and JD.com. Since Friday, the Nasdaq Golden Dragon China index has fallen 15 per cent.

Chinese VIEs, usually based in tax havens such as the Cayman Islands, are essentially holding companies designed to get around strict rules that forbid foreign investors from any ownership over key sectors, such as tech. In theory, they entitle US shareholders to the economic benefits flowing from a Chinese company while limiting their operating control of the business
 

Hamartia Antidote

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Please ignore the smokescreen articles/rants posted in this thread that this is only related to Chinese stocks in US stock markets or targeting foreign investors in Chinese companies...:rolleyes1:


  • The CSI 300 which tracks the biggest mainland China stocks, along with Hong Kong’s Hang Seng index, are currently among the worst-performing in Asia-Pacific.
  • Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants like Tencent, Alibaba and Meituan are among the top 5 constituents of the index, as of Jun 30.
  • The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery.


Days of heavy selling in Chinese stocks have left two major indexes in the country as the worst-performing markets of Asia-Pacific.

At the close of regional markets on Tuesday, the CSI 300 — which tracks the largest stocks listed in mainland China — had plunged 8.83% so far this year. Hong Kong’s Hang Seng index also suffered heavy losses, falling 7.88% in the same period.

“There hasn’t been a single two-day decline (for the Hang Seng index) since the Financial Crisis that has exceeded the magnitude of the last two days,” analysts at Bespoke Investment Group wrote in a note.

Other major mainland indexes such as the Shanghai composite and Shenzhen component were also in negative territory for the year, among the few major Asia-Pacific markets that lost ground year-to-date.

Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants such as Tencent, Alibaba and Meituan were among the top 5 constituents of the index, as of Jun 30.

The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery. The increased scrutiny spooked investors and sent many scrambling for the exit.
Hong Kong and China markets traded mixed in Wednesday morning trade, struggling to recover from the declines of the past few days.

At the start of the second half, all the major Chinese indexes and the Hang Seng were in positive territory for the year. The Shenzhen component was up 4.78% while the CSI 300 index was just 0.24% higher as of end June. Hong Kong’s Hang Seng index was also up 5.86% in the same period.
Timeline of events
The latest sell-off in Chinese stocks started after a Bloomberg report last week said Chinese regulators are planning heavy penalties for ride-hailing giant Didi that could include massive fines and a forced delisting.
Following that first domino, reports also emerged late last week of a government crackdown on China’s private education sector, which sent U.S.-listed Chinese education stocks tumbling. Chinese education stocks in Hong Kong also took a beating, with New Oriental Education & Technology Group, Koolearn Technology and China Beststudy Education Group plunging more than 30% each on Monday.
Next, China’s antitrust regulator ordered Tencent on the weekend to give up its exclusive music licensing rights and slapped a fine on the company for anti-competitive behavior
 
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Viet

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They are supposed to say that......the CPC is angry.
Yes because these chinese listed companies report to foreigners, they transfer the earnings to foreigners, they don’t stand under the control of Ccp. Bad luck, as such they are seen as public enemy. Chinese are on the nationalistic drive.
 

northeast

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Please ignore the smokescreen articles/rants posted in this thread that this is only related to Chinese stocks in US stock markets or targeting foreign investors in Chinese companies...:rolleyes1:


  • The CSI 300 which tracks the biggest mainland China stocks, along with Hong Kong’s Hang Seng index, are currently among the worst-performing in Asia-Pacific.
  • Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants like Tencent, Alibaba and Meituan are among the top 5 constituents of the index, as of Jun 30.
  • The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery.


Days of heavy selling in Chinese stocks have left two major indexes in the country as the worst-performing markets of Asia-Pacific.

At the close of regional markets on Tuesday, the CSI 300 — which tracks the largest stocks listed in mainland China — had plunged 8.83% so far this year. Hong Kong’s Hang Seng index also suffered heavy losses, falling 7.88% in the same period.

“There hasn’t been a single two-day decline (for the Hang Seng index) since the Financial Crisis that has exceeded the magnitude of the last two days,” analysts at Bespoke Investment Group wrote in a note.

Other major mainland indexes such as the Shanghai composite and Shenzhen component were also in negative territory for the year, among the few major Asia-Pacific markets that lost ground year-to-date.

Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants such as Tencent, Alibaba and Meituan were among the top 5 constituents of the index, as of Jun 30.

The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery. The increased scrutiny spooked investors and sent many scrambling for the exit.
Hong Kong and China markets traded mixed in Wednesday morning trade, struggling to recover from the declines of the past few days.

At the start of the second half, all the major Chinese indexes and the Hang Seng were in positive territory for the year. The Shenzhen component was up 4.78% while the CSI 300 index was just 0.24% higher as of end June. Hong Kong’s Hang Seng index was also up 5.86% in the same period.
Timeline of events
The latest sell-off in Chinese stocks started after a Bloomberg report last week said Chinese regulators are planning heavy penalties for ride-hailing giant Didi that could include massive fines and a forced delisting.
Following that first domino, reports also emerged late last week of a government crackdown on China’s private education sector, which sent U.S.-listed Chinese education stocks tumbling. Chinese education stocks in Hong Kong also took a beating, with New Oriental Education & Technology Group, Koolearn Technology and China Beststudy Education Group plunging more than 30% each on Monday.
Next, China’s antitrust regulator ordered Tencent on the weekend to give up its exclusive music licensing rights and slapped a fine on the company for anti-competitive behavior
Thanks for sharing our pain for your enemy China's long term goodness.:-)
 

艹艹艹

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casual

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Please ignore the smokescreen articles/rants posted in this thread that this is only related to Chinese stocks in US stock markets or targeting foreign investors in Chinese companies...:rolleyes1:


  • The CSI 300 which tracks the biggest mainland China stocks, along with Hong Kong’s Hang Seng index, are currently among the worst-performing in Asia-Pacific.
  • Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants like Tencent, Alibaba and Meituan are among the top 5 constituents of the index, as of Jun 30.
  • The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery.


Days of heavy selling in Chinese stocks have left two major indexes in the country as the worst-performing markets of Asia-Pacific.

At the close of regional markets on Tuesday, the CSI 300 — which tracks the largest stocks listed in mainland China — had plunged 8.83% so far this year. Hong Kong’s Hang Seng index also suffered heavy losses, falling 7.88% in the same period.

“There hasn’t been a single two-day decline (for the Hang Seng index) since the Financial Crisis that has exceeded the magnitude of the last two days,” analysts at Bespoke Investment Group wrote in a note.

Other major mainland indexes such as the Shanghai composite and Shenzhen component were also in negative territory for the year, among the few major Asia-Pacific markets that lost ground year-to-date.

Separately, the MSCI Emerging Markets index has also tumbled into negative territory for the year. Chinese internet giants such as Tencent, Alibaba and Meituan were among the top 5 constituents of the index, as of Jun 30.

The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery. The increased scrutiny spooked investors and sent many scrambling for the exit.
Hong Kong and China markets traded mixed in Wednesday morning trade, struggling to recover from the declines of the past few days.

At the start of the second half, all the major Chinese indexes and the Hang Seng were in positive territory for the year. The Shenzhen component was up 4.78% while the CSI 300 index was just 0.24% higher as of end June. Hong Kong’s Hang Seng index was also up 5.86% in the same period.
Timeline of events
The latest sell-off in Chinese stocks started after a Bloomberg report last week said Chinese regulators are planning heavy penalties for ride-hailing giant Didi that could include massive fines and a forced delisting.
Following that first domino, reports also emerged late last week of a government crackdown on China’s private education sector, which sent U.S.-listed Chinese education stocks tumbling. Chinese education stocks in Hong Kong also took a beating, with New Oriental Education & Technology Group, Koolearn Technology and China Beststudy Education Group plunging more than 30% each on Monday.
Next, China’s antitrust regulator ordered Tencent on the weekend to give up its exclusive music licensing rights and slapped a fine on the company for anti-competitive behavior
lol look at this guy caring so much about Chinese stock market that no one in China cares about.

stock market != economy
 

redtom

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No this cannot be good no matter which way you look at it. But blame does not go to CPC fully. It turns out many chinese companies made money in a manner which will be illegal in usa. Like Alibaba forcing merchants to sell to them exlusively and not accepting other payment modes.

One thing i dont understand - CPC seems to understand the value of competition and fairplay. Then why not in politics ? why cant they have two parties sworn to uphold a constituion written whatever way CPC wants right now.
Because both parties will benefit their own parties by tearing society apart.

Political parties are supposed to represent the interests of a group. Two people who are both workers do not have different interests just because one supports the Democrats and one supports the Republicans. What these two workers should really do is unite and fight for workers' rights. Instead of fighting each other over petty issues.

The power of the government is limited, it should only take care of the big issues, and in the big issues, the workers should be with the workers, the farmers with the farmers, and the billionaires with themselves. This is a horizontal division based on the structure of the economy.

But when billionaires split into two political parties, the issues they hype are smaller, and the smaller issues are more technical. And people are vertically divided into different groups because of their differing opinions on technical issues. They lose sight of the issues they should be focusing on. Technical issues should be decided by experts, not by ordinary people.

Have you ever wondered why, if American-style democracy is such a great system, companies don't elect ceos by all employees, but by the Chinese-style system? Do you find that the political structure in China is very similar to the board of directors of big companies.


Considering you may not know much about the Chinese political system. I can give you a brief introduction. China's power system is divided into three parts, the CPC, the people's Congress and the government, with a complementary body, the Political Consultative Conference.

Administrative matters are handled by The State Council, the top body of the government, which is headed by the premier, now Li Keqiang. Courts, police and prosecutors are also part of the government.

The CPC is the only ruling party and represents the proletariat. Everyone in China can join CPC with no criminal record and just pass the exam. CPC is controlled by PLA.The core organ of power in the CPC is the Politburo, headed by Xi Jinping, as well as the seven-member Standing Committee.

Deputies to the People's Congress are elected, and you can only hold elections in your constituency, which is local. The NPC is responsible for making laws and impeaching government officials.

In addition, there are eight democratic parties in China, which are inherited from the ROC era and represent the bourgeoisie, intellectuals, the left wing of the KMT (right wing is now in Taiwan) and so on. They can elect deputies to the People's Congress and become government officials. But their main political activity is in the political consultative Conference.
 
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