Chinese President Xi Jinping on Tuesday sent out a clear signal to officials to steer clear of any unholy nexus with big businesses in the country.
What Happened: Action should be taken to prevent Chinese officials from acting in favor of any interest or power group and colluding with businesses, Xi said while speaking at a meeting of the Communist Party’s Discipline Inspection Commission on Monday, Xinhua reported.
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Xi also warned against the “infiltration of capital into politics,” and called for improving laws and regulations targeting bribery and handing out punishment for those offering bribes.
Why It’s Important: Witch-hunting by the Chinese regulators has pressured several high-profile domestic companies having multinational businesses, wiping away billions from their market capitalization.
Shares of Jack Ma-founded Alibaba Group Holdings Limited BABA and Tencent Holdings Limited TCEHY have plunged sharply since the start of 2021 amid the regulatory crackdowns.
Their shares have begun to turn the corner only recently on hopes that the crackdown will slow down. Alibaba’s Ma is planning to give up controlling rights in the e-commerce giant’s sister company Ant Financial, paving the way for relaunching its shelved initial public offering.
Xi has been using his tough stance against corruption during his reign for furthering his popularity among the public and also to keep at bay any potential threat to his rule, Bloomberg reported.
Price Action: Alibaba closed Monday's session up 3.19%, at $110.83, according to Benzinga Pro data. The stock rose about 2.40% in premarket trading on Tuesday.
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