Alibaba, Tencent shares plummet 11% alongside China tech stocks as Xi tightens grip on power
China’s President Xi Jinping speaking at the opening session of the 20th Chinese Communist Party’s Congress at the Great Hall of the People in Beijing on Oct. 16, 2022.
Noel Celis | AFP | Getty Images
Chinese technology stocks tanked Monday after a political reshuffle in the world’s second-largest economy tightened President Xi Jinping’s grip on power with investors fearing this could be a negative for private firms.
Tech giants Alibaba and Tencent closed down more than 11% in Asia; search company Baidu was 12% lower while food delivery firm Meituan tanked more than 14%.
The moves come after Xi paved the way for an unprecedented third term as leader and packed the Politburo standing committee, the core circle of power in the ruling Communist Party of China, with loyalists.
That makes it unlikely that anyone would challenge any “policy mistakes” that Xi makes which could hamper growth of the tech sector, Xin Sun, senior lecturer in Chinese and East Asian business, at King’s College London said.
“Now that the new Politburo standing committee is packed with Xi’s own picks and those in rival factions … were all out, it becomes clear that no other political elite dares to challenge his policy mistakes or even deviate however slightly from his preferred policy agenda, which of course over the past few years has focused on favouring the state sector at the expense of the private one,” Sun told CNBC via email.
“As a result, it is unlikely for these policies to be reversed or corrected, leading to an extremely gloomy economic outlook.”
Under Xi’s leadership, China has implemented a raft of policy that has tightened regulation on the tech sector in areas from data protection to governing the way in which algorithms can be used.
Meanwhile, Xi has stuck to the strict “zero-Covid” policy which has seen cities, including the mega financial hub of Shanghai, locked down this year, even as most of the world has opened their economies.
These two policies have contributed to billions of dollars being wiped of the value of Chinese tech giants and companies including Tencent and Alibaba reporting their slowest growth in history this year.
“Tech stocks have never been the best friend of Xi and it’s clear that the market thinks that purge will continue,” Justin Tang, head of Asian research at United First Partners, told CNBC.
As part of the leadership reshuffle in China, Li Qiang, party secretary of Shanghai is expected to be made premier next year. Li oversaw oversaw the lockdowns and “zero-Covid” approach in Shanghai this year. He has not served as vice-premier marking a break with a long-standing tradition of the Communist Party. Li will replace outgoing Premier Li Keqiang, an official seen as pro-business.
Sun said the new leadership is largely party officials “who had limited to no prior experience or credible record in economic management,” marking another reason investors are concerned about the future.
“A rigid political regime with limited capacity to correct many of its policy mistakes, the lack of capable and experienced economic policymakers, and growing geopolitical risks, all under the leadership of a single person whose track record has proven unfriendly towards the private sector,” Sun said, explaining the negative market sentiment toward China tech stocks.
However, not all analysts are concerned about further regulatory tightening. In the last few months, Beijing has taken less dramatic regulatory action against tech giants, prompting some commentators to suggest a softening stance from the government toward internet companies.
“Some of the policy toward tech stocks has been softened,” Duncan Wrigley, chief China economist at Pantheon Macroeconomics, told CNBC’s “Street Signs Europe.”
“Overall, I think the stance of the leadership and the governments has become on balance more positive over the last year.”
An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025.
Isabel Infantes | Reuters
Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.
Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.
Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.
Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.
“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”
The Nintendo Switch 2 and “Mario Kart World“ bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.
However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”
It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.
WATCH: Nintendo has ‘a lot of work to do’ to convince casual users to upgrade to Switch 2: Kantan Games
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
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