China Stocks Fall Anew; Pandemic Stirs Growth Worries, Thins Billionaire Ranks

Bellwether China stocks fell anew in the U.S. today after broad declines in share prices at home on Thursday amid worries about the impact of the country’s continued “zero-Covid” policies on economic growth and corporate earnings.

The main index of the Shanghai Stock Exchange fell 2.26% on Thursday to 3,079.81. It has lost 11% in the past month and is nearing a two-year low. In the U.S. today, top China Internet shares dropped: Alibaba lost 3.4% to $85.99; Pinduoduo more dramatically plunged 6.9% to $34.75 and has shed nearly three-quarters of its value in the past year.

Investors hoping for new Covid or economic policies from President Xi Jinping in a speech at a high-profile China economic conference yesterday didn’t get it. His presentation didn’t appear suggest any Covid policy switches and also offered no compromise on Beijing’s support for Russia that has added to strains in China’s ties with Washington in the aftermath of Moscow’s Ukraine invasion. Xi spoke after the IMF earlier this week cut its forecast of China’s economic growth this year to 4.4% from 4.8% on fallout from the pandemic.

China was reported to have 19,458 new Covid cases yesterday, mostly in Shanghai. Swaths of the once-bustling business and financial hub have gone quiet amid lockdowns affecting its 26 million residents.

Real estate-related stocks already hammered by excess supplies and debt woes remained weak. In U.S. trade, Beijing-headquartered KE Holdings, one of the world’s largest real estate brokerage chains, plunged 7.8% to $11.87, and are off 78% in the past year.

Travel shares were also hit. Shanghai-based Huazhu, a hotel network operator chaired by China billionaire Ji Qi, fell 9.6% to $29.14 in New York. Smaller chain GreenTree Hospitality, also based in Shanghai, lost 7.3% to $4.18 in New York. Shanghai Jin Jiang International Hotels fell 4% to 52.55 yuan at the Shanghai Stock Exchange yesterday. Among airlines, China Eastern lost 3.6% at the New York Stock Exchange to $15.97.

Although a decline in shares lowered the number of billionaires in China from a year earlier, the mainland nevertheless ranked No. 2 with 539 members of the 2022 Forbes Billionaires List published earlier this month. We used stock prices and exchange rates from March 11, 2022 to calculate those net worths; further declines in China stock prices have thinned the country’s ranks since the list was posted. Among the listees to fall below that $1 billion threshold, Zhong Baoshan, chairman of solar cell maker LONGi Green Energy, has seen his fortune fall to $927 million yesterday from $1.1 billion on the list. The fortune of newcomer Xu Gang, chairman of titanium dioxide pigments Lomon Billions Group, has slid to $985 million from an estimated $1.3 billion on the list.

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@rflannerychina