In less than 6 months China managed to erase $ 840bn of the market capitalization of technology companies based in its country, in less than 6 months China managed to lower the hash rate of Bitcoin miners by 50%, and this year China created just 10% of Unicorns he created in 2020 and even less than in 2019.
While many say that China wants to hurt Western shareholders, the reality is that China is simply a centralized economy and anything beyond its planning puts that control at risk.
That is why he did everything with regulations and where regulations did not arrive, with corrections such as that of Jack Ma who disappeared from public life, and when he reappeared he did not have a university position ...
Jack Ma's problem is not Alibaba but Ant Group, while the first generates an ecosystem of sales and data that allows the Chinese economy to grow with the state watching closely, the second generates financial freedom and a mountain of data that the government wants for itself and does not want to share ... that is why the attack on Ma occurred from the moment in which the people were invited to invest in a company that was going to confront the Chinese banks, who grow with state participation or do not grow.
But let's go back to what seems like a short-term look, the market is concerned that listed companies lost much of their value by understanding that they are tied to Chinese regulation (eg: Didi was forced to remove his app for " misuse of personal data " ) that it is not tied to Western power control processes; The reality is that the "crackdown" is not caused by valuations but by loss of control or access to the information that the government believes.
When you analyze that the Chinese unicorn market fell to a level that it did not have in a long time when the rest of the world experiences an abundance of capital and inflation in valuations that remind us of 1999, something does not close ... and I do not think that is the potential from India or Latam, but even Chinese investors are drying up their market, understanding that their growth will be only what the government authorizes.
The same thing happens with crypto miners, I do not think that the reason for intervening in that market was "climate change" and not even the "value of bitcoin" but the need to put a brake on a growth that they were not being able to control and that, I honestly don't think they can control ... as long as their e-RMB (数字 人民币) is still in tests and is not deployed in the full market, China is going to see miners as potential problems for its digital currency (silver in BTC is silver that does not enter e-RMB).
But isn't China hurting its ecosystem? Maybe yes, maybe not; Its market is large enough not to depend on what the West thinks, the data (of use, personal, etc.) that Chinese companies put on the market are data that the government considers key to its social control and at the end of the day if they make a mistake they have a back to fix it.
Image Source - https://www.globaltimes.cn/content/1204456.shtml