China’s Crusade Against Risk Is Tormenting Financial Markets
- Stocks lost $1.3 trillion amid warnings about asset bubbles
- Central bank targets leverage; fintech is also under scrutiny
This article is for subscribers only.
Divining the targets of Beijing’s latest de-risking campaign is becoming an essential trading strategy.
Those who failed to take heed of warnings about asset bubbles by officials were steamrolled by a $1.3 trillion rout in Chinese equities, with the most popular stocks bearing the brunt of the selloff. That came shortly after Beijing stunned millions of would-be investors by canning Ant Group Co.’s $35 billion listing at the 11th hour, despite evidence that regulators had growing concerns over its business model. In another sign of complacency, Tencent Holdings Ltd. neared $1 trillion in value even as the fintech industry came under attack, only for the stock to then suffer its worst week since 2011.