Chinese Stocks are Unpredictable with No End in Sight

In 2022, the Stocks prices of vital Chinese companies have fluctuated. Concerns about leading Chinese companies being delisted in the United States, Beijing’s crackdowns on big Chinese internet firms, criticism of China’s “no limits” ties with Russia, and a revival of Covid cases in China were among the factors weighing on the sentiment.

Tencent (TCEHY), Alibaba (BABA), China Construction Bank (CICHF), Baidu (BIDU), and Nio (NIO) are among the top Chinese businesses represented by the iShares MSCI China ETF (MCHI), which has lost 16 percent this year.

Last Monday, a commission convened by Chinese Vice Premier Liu He recommended that the government aggressively roll out market-friendly measures. Ipek Ozkardeskaya, a senior analyst with Swissquote, said that china’s promise to loosen regulatory restrictions and support property and technology Stocks could be a game- and trend-changer. They also added that it appears that the latest selloff was so strong that it caused the Chinese government to throw in the towel.

Beijing also noted last week that US and Chinese regulators have made “positive progress” in talks about US listings for Chinese Stocks. That may decrease concerns that companies like Alibaba and JD could be booted off US exchanges. The uptick in Covid cases in China may also push Beijing regulators to shift policy as they try to minimize some of the well-publicized supply chain woes that have hurt the Chinese economy and led to intensified inflation pressures in the US.