By Diksha Madhok and Jill Disis, CNN Business
Chinese tech stocks got a big boost in Hong Kong on the last day of the year, but it’s far from enough to make up for what has been a historically tumultuous time for the sector.
Shares in tech and internet giants Alibaba, Baidu and Bilibili — all of which also trade in New York — soared more than 8% on Friday, making them among the top performers during a shortened trading session in Hong Kong.
The Hang Seng TECH Index — which tracks the 30 largest tech firms that trade in the city — was up 3.57%, outperforming the broader benchmark Hang Seng Index, which rose 1.2%.
The boost followed strong performances by Chinese tech companies Thursday on Wall Street. Electric automaker Nio and Tencent Music Entertainment Group rose nearly 15%, while Alibaba climbed 9.7%.
The year overall, though, has not been kind to Chinese tech. Alibaba’s Hong Kong-listed shares have shed nearly half their value in 2021. Tencent — which closed up 3% on Friday — has lost 19%. Baidu, which held a secondary listing in Hong Kong earlier this year, has lost 43% since that debut.
Chinese companies were heavily shaken by Beijing’s sweeping regulatory crackdown on private businesses. The curbs on tech, finance, education and entertainment hammered stocks and at one point wiped out trillions of dollars worth of value from Chinese companies on global markets.
There are signs that Beijing may not want to rock the boat any further in the new year, as China’s growth has slowed due to repeated Covid-19 outbreaks, supply chain disruptions, a power crunch, and the real estate crisis.
During a key economic meeting earlier this month, top leaders from the ruling Chinese Communist Party marked “stability” as their top priority for 2022. That’s a huge pivot from last year’s meeting, when “curbing the disorderly expansion of capital” ruled the day.
Even so, there are some big concerns on the horizon. Beijing took a couple of steps in recent days that show it is planning to tighten restrictions for Chinese companies that want to list overseas. And while the government won’t ban them from trading abroad altogether, life might be getting a lot tougher for firms hoping to score more foreign investment.
Last week, for example, regulators proposed that companies may be blocked from holding foreign initial public offerings if authorities deem them threats to national security, and added that companies may be required to divest some assets “to eliminate or avoid the impact of overseas issuance and listing on national security.”
Washington has also enacted audit rules that could affect Chinese firms, a sign of continuing tensions between the United States and China — and one that could squeeze firms that still trade in New York.
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