馃攳
Didi, Alibaba, Tencent: The Risks of Investing in Chinese Tech | WSJ - YouTube
Channel: unknown
[1]
- [Narrator] Alibaba's
e-commerce platforms,
[3]
Tencent's video games,
[5]
DiDi's ride hailing service,
[7]
these are some of China's
biggest names in tech,
[10]
and for the past several years,
[12]
foreign investors have been pouring money
[14]
into their stocks.
[15]
But this summer, those
shares listed in New York
[18]
and Hong Kong saw sharp selloffs
[20]
and it had little to do with
their business performance.
[23]
China has taken a series of actions
[25]
against big tech, and those moves,
[27]
from clamping down on
alleged monopolistic behavior
[30]
to tightening rules on data security
[32]
have sent shock waves through
international markets.
[35]
- There has been a sense
amongst Chinese officials
[38]
that some of these companies
have become a bit too powerful.
[41]
- [Narrator] In July alone,
[42]
food delivery app Meituan,
[44]
Tencent, Alibaba and short
video app Kuaishou lost
[48]
about 20% of their combined market value.
[51]
A top Chinese securities regulator
[53]
privately reassured
foreign financial firms
[56]
that the government would
consider the market impact
[58]
of its policy decisions.
[60]
But investors wonder what the future holds
[63]
of China's tech companies,
and more broadly,
[65]
for listings of Chinese companies
[67]
in the US and other countries.
[69]
- The scope and severity
of the moves recently
[71]
has taken people aback.
[73]
Many foreign investors
are kind of asking okay,
[76]
we thought we knew all the risks here
[78]
but are things actually
worse than we imagined?
[81]
(dramatic music)
[82]
- [Narrator] China has stepped up efforts
[83]
to rein in big tech.
[84]
And fast-growing firms like Tencent
[86]
and ride hailing app DiDi,
[88]
which have become central
to everyday life in China
[91]
have been subject to the clamp down.
[93]
- [Quentin] In many ways,
DiDi is the Uber of China.
[95]
- [Narrator] Earlier this year,
[96]
DiDi went public on the
New York Stock Exchange
[98]
in a multi-billion dollar IPO
[100]
that was completed in just a few days.
[102]
- It emerged that perhaps
[103]
they hadn't got the full sign off
[105]
from the Chinese authorities
[107]
or at least the Chinese authorities
[108]
had suggested to them they
might wanna hold off partly
[111]
for kind of data security reasons.
[113]
But DiDi pressed ahead.
[115]
- [Narrator] China's regulars
launched a cybersecurity probe
[118]
and suspended DiDi's apps
[120]
and said the company, which
collects a range of user data,
[123]
hadn't complied with China's
data protection rules.
[126]
Shortly after, its stock plummeted.
[129]
- [Quentin] It kind of left
investors with the sense
[131]
that DiDi had been punished
for having the temerity
[133]
to go public when it should perhaps
[135]
have been more heedful
[136]
of what Chinese regulators were saying.
[139]
- [Narrator] DiDi said it
would comply with requirements
[141]
made by relevant authorities.
[143]
(speaking in foreign language)
[149]
- [Narrator] Last year,
after billionaire Jack Ma
[151]
publicly called for regulatory changes,
[154]
Chinese authorities
targeted Ant and Alibaba,
[157]
two firms he's closely associated with.
[159]
Regulators shut down
Ant's blockbuster IPO,
[162]
which was expected to be the
world's largest public listing,
[165]
and launched an antitrust
probe into Alibaba.
[169]
Now after all these events,
markets are jittery.
[173]
In August when a state-owned
Chinese newspaper
[175]
criticized online gaming
as opium for the mind,
[178]
the stock of gaming giant
Tencent saw a massive selloff.
[182]
Tencent, also the owner of social media
[185]
and messaging platform WeChat,
[187]
has recently come under pressure
[188]
to address what authorities
[190]
are calling anti-competitive practices
[192]
and security issues.
[194]
Tencent said it would introduce new rules,
[196]
including stricter
curbs on younger gamers.
[200]
Some investors wonder
if Chinese authorities
[202]
might also target the
mechanism foreign buyers use
[205]
to invest in Chinese
stocks listed offshore.
[208]
If you're investing in certain
US-listed Chinese companies,
[211]
like Alibaba, you're not
exactly buying shares directly
[215]
in the business.
[215]
You're buying into an offshore vehicle
[217]
that has a series of legal arrangements
[219]
with the operations inside China.
[222]
This setup uses what is known as a VIE,
[225]
or a variable interest entity.
[227]
- There are literally
trillions of dollars worth
[229]
in market cap of Chinese
companies listed abroad.
[232]
And most of that is done
through these VIE structures.
[235]
Over time, some people have questioned it
[236]
because it operates in
this kind of gray area
[238]
where the Chinese authorities
might one day kind
[241]
of decide that they
don't like this loophole.
[244]
- [Narrator] Until recently,
Chinese companies going public
[246]
in the US were a bright spot
[247]
in the otherwise tumultuous
US-China relationship.
[251]
And some Chinese tech stocks
[252]
have produced big gains
for foreign investors
[254]
in the last few years.
[256]
But now everyone's watching to see
[258]
what steps Chinese
regulators will take next.
[262]
(speaking in foreign language)
[270]
- There is a sense maybe
that the Chinese regulators
[272]
were kind of blindsided
[274]
by how severe the foreign reaction was.
[277]
They don't wanna completely close the door
[278]
on the outside world,
[280]
and they don't want to
completely terrify markets.
[283]
But they also are pretty resolute
[285]
about what they feel they need to do,
[287]
and they feel like this is all good
[289]
for the long-term development
of the Chinese economy.
[292]
It seems like the campaign isn't over.
Most Recent Videos:
You can go back to the homepage right here: Homepage