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China economy
OpinionLetters

Letters | Act quickly to keep China’s tech crackdown from spoiling investment environment

  • Our readers react to China’s crackdown on the education and technology sectors, Hong Kong’s pandemic controls and wanton environmental destruction

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A visitor walks past a logo for Tencent at its display at the China International Fair for Trade in Services in Beijing on September 5, 2020. Foreign shareholders in China’s tech companies are learning what its entrepreneurs have long known: Beijing’s decisions about what is good for the economy can hurt corporate bottom lines. Photo: AP
Letters

While China’s gross domestic product has risen on average 7 to 8 per cent a year for the last 10 years, the mainland stock market has remained fairly static and is only a little more than half of the level it reached at its 2007 record high.

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International capital is looking warily at the mainland stock market worrying about different sets of foreign controls, transparency among the regulating authorities and a lack of trust in general in official Chinese statistics. Chinese companies have long been under attack by people such as Muddy Waters and American politicians.
The recent crackdown on various technology giants and the education sector has caused a mini stock crash among Chinese shares. Such sudden corrections have come far too frequently.

International investors and the Western media now appear to be trying to create a perception that the Chinese market has many uncontrollable factors and is not an investible market in an attempt to starve Chinese companies of financial support.

The Hang Seng Index is still trading at about half of the price-to-earnings ratio of the S&P 500, and there are many Chinese stocks that are also now trading at a very humble PE ratio. The central government needs to attend to this as soon as possible. To start with, there needs a good clean-up of the non-investible companies listing in the mainland and Hong Kong.

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Crackdown on private tutoring leaves industry, students and parents drawing a blank

Crackdown on private tutoring leaves industry, students and parents drawing a blank

I am sure that if the Chinese government wants to tackle this, there is nothing that can stop China’s equity market from becoming the most investible market in the world.

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